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Assignment Professional Communication

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Added on  2020-04-01

Assignment Professional Communication

   Added on 2020-04-01

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Running head: PROFESSIONAL COMMUNICATION Professional CommunicationName of the StudentName of the UniversityAuthor note
Assignment Professional Communication_1
1PROFESSIOANL COMMUNICATION Table of ContentsIntroduction......................................................................................................................................2Law of demand................................................................................................................................2Price decrease and Profit.................................................................................................................2Price elasticity of demand and profit...........................................................................................3Decision of price reduction..........................................................................................................5Conclusion.......................................................................................................................................6References........................................................................................................................................7
Assignment Professional Communication_2
2PROFESSIOANL COMMUNICATION IntroductionAll the business firms operate in an attempt to maximize its profit. Profit refers to what isleft to the entrepreneur after making payment to all the factors of production. In other words,profit is total revenue less total cost. Now, revenue is the volume of sale multiplied with unitprices. Greater the revenue, higher is the profit given cost. Revenue depends on magnitude ofquantity sold and price. Change in price and quantity are interrelated and the ultimate effect onrevenue depend on the magnitude of price and quantity change that generally moves in oppositedirection. Law of demand Law of demand explains the relation between price and quantity holding other demand-influencing factor constant. Law of demand states that if there is an increase in price then itsquantity demanded will decrease. A decrease in price makes the goods more affordable andhence increases its demand1. Therefore, when business firms reduces price, the obviousexpectation is to experience a boost is quantity demanded. This will compensate the loss fromprice decrease and increases profit. Price decrease and Profit A decrease in prices while expected to boost the demand and increase profit, this may notbe the case always. When price decreases then what will happen to demand and profit thatdepends on the nature and slope of the demand curve. When price reduces, then there will be areduction in revenue from each unit of the product sold. Now, if quantity demanded is not1Cerreia-Vioglio, S., et al.Law of Demand and Forced Choice. No. 593. 2016.
Assignment Professional Communication_3

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