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Assignment on Price Reduction Cause and Consequence

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Added on  2020-03-16

Assignment on Price Reduction Cause and Consequence

   Added on 2020-03-16

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If a business drops its price will italways increase demand - and will itmake more profit
Assignment on Price Reduction Cause and Consequence_1
Li, Z. and Yada, K., 2015, November. Why do Retailers End Price Promotions: A Study onDuration and Profit Effects of Promotion. In Data Mining Workshop (ICDMW), 2015 IEEEInternational Conference on (pp. 328-335). IEEE.Study of Li and Yada shows product or service prices might have a great competitive edgebut requires providing the seller sufficient profit. For the fear of business failure, most of thesellers cut their margins off during the time of loss. Businesses often drop prices of theirproduct and services hoping that this low reduction can lead to considerable increase in thedemand and as a result a substantial increase in profits. This research is focused on cause andconsequence of the reduction in product prices. Cited study concludes that making suchimprovements to the performance may have yielded better fiscal performance in short term,the management of the company understood it will not address the declining market share.Further it states that pricing is a very critical decision and blatantly cutting prices is not asolution every time. This article is significant for the research as it is recent considers allmajor factors and objective which led to a reduction in prices. This article does not have anysignificant limitation as it is perfectly linked to my research and provide be the basis for mywork.Tisdell, C.A., 2015. The theory of price uncertainty, production, and profit. PrincetonUniversity Press.Consider book for the research is based on the theoretical framework of priceuncertainty, production, and profit by considering recent market conditions of Australia.According to the viewpoint of Tisdel; if or if not the reduction in price might boost profit relyon the demand elasticity of the product as per consideration. Prices influence the volume andthus profits. However, the heavy amount is to be paid if it results negative. There is a need toknow the price adjustment would have a gradual effect on profits. This book is a secondarysupport to my study due to a major limitation of linkage to economics. However; study of thissource provided me learning that a businessman is said to be smart when he recognizes thatlow price renders either low quality or worse services. Generally, the price set by companiesregarding their products in a variety enables business to be more sustainableMankiw, N.G., 2014. Principles of macroeconomics. Cengage Learning.
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