Management Economics 1: Analysis of Demand and Pricing Policy of Ferrari

MANAGEMENT
ECONOMICS- 1

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Describe the business and its main product or service................................................................1
TASK 2............................................................................................................................................2
Identify the demand and market equilibrium which influenced the demand of their products.. 2
TASK 3 ...........................................................................................................................................4
Indicate the elasticity or more elasticity of demand for the given factors..................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Economics is the study of micro and macro aspects which is affecting the overall growth
of the country and accessing in providing the growth and development to the
economy(Vochozka and et. al., 2018). Management economics is the study which focuses
solving the certain issues of the employees and apply the certain theories so that they can
appropriately understand the business environment. There are is the huge impact of demand and
supply over the products but increase in the prices of product does not make much effect on
luxury goods. Ferrari is the chosen organisation for this report, it is the luxury sports car Italian
company which is founded in 1939 by Enzo Ferrari. This report will analyse the product of the
company and also identify the demand and elasticity of demand in respective of the products.
Moreover, It will explain the pricing policy that will be beneficial for the company.
TASK 1
Describe the business and its main product or service.
Ferrari is the leading company is the auto mobiles industry and they have launched their
first Ferrari badge car in 1947. The headquarter of this company is Maranello, Emilia-
Romangna, Italy. As they are operating their business world-wide with more than 4000
employees in different locations. They are dealing in eye-wear, clothing, high-tech bicycles,
watches and laptops etc.
Chosen product:
The chosen product for company is sports as these are the luxury product of the company
and they are available on customised demand of the customer. The demand for such product is
based on the income level of the consumer as they are having premium pricing policy so that
there is no effect with the change in the price of the sports car.
Explantation of choosing that product:
Ferrari is know for its luxury sports car so this will helps in recognising the elasticity of
demand and demand for these goods due to change in the other factors which is effecting the
demand of the company so that they can have the large customer base. Sports car is majorly
owned by the high income individuals as they are having interest in luxury sports car and want to
show their status, people often buy such expensive sports car.
1