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BUS702 : Economics for Managers (Doc)

   

Added on  2020-05-04

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Running head: ECONOMICS FOR MANAGERSEconomics for ManagersName of the StudentsName of the UniversityAuthor note
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1ECONOMICS FOR MANAGERSTable of ContentsAnswer 1..........................................................................................................................................1Answer 2..........................................................................................................................................2Answer (a)...................................................................................................................................2Answer (b)...................................................................................................................................3Answer (c)...................................................................................................................................3Answer (d)...................................................................................................................................4
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2ECONOMICS FOR MANAGERSAnswer 1 It is seen that in order to improve health of consumers in the economy it is necessary thatthe government impose taxes or subsidy on the right goods to help people curb theirconsumption of unhealthy foods. Elasticity of demand pays a crucial role in helping thegovernment decide the types of food they will impose taxes or subsidy this is because elasticityof demand tells the degree of effect on demand with a change in price of the goods. The demandfor inelastic goods will not change with a change in price. On the other hand, demand for elasticgoods gets affected to greater extent to slight change in price.Thus, in the particular scenario it is seen that some of the categories of dairy products and fruitsand vegetable of higher calorie has high elasticity of demand while others low calorie fruits andvegetable have low elastic demand. Similarly, some of the high calories grains also have highelasticity of demand while low calories grain has low elasticity of demand. Thus, the governmentcan increase the price of high calorie goods that has higher calorie, which will change thedemand significantly. Similarly, it can lower the price of healthy and low calorie foods withhigher elasticity so that with low prices the demand increases drastically.
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