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ECO 402 - The Interconnection Between Demand, Profits and Prices

7 Pages1429 Words63 Views
   

University of Kentucky

   

Macroeconomics (ECO4023)

   

Added on  2020-03-13

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In this document, we conduct a peer review of four journals, discussing the question -"If a business drops its price will it always increase demand and will it always make more profit? 

ECO 402 - The Interconnection Between Demand, Profits and Prices

   

University of Kentucky

   

Macroeconomics (ECO4023)

   Added on 2020-03-13

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Annotated Bibliography: If a business drops its price will it always increasedemand-and will it always make more profit?Student Name:Student ID:Subject Name:Subject ID:Date Due:Professor Name:1 | P a g e
ECO 402 - The Interconnection Between Demand, Profits and Prices_1
1.Identification and Citation of Sources: Book:Christensen, C., & Raynor, M. (2013).The innovator's solution: Creating and sustaining successful growth. Harvard Business Review Press[ CITATION Chr131 \l 1033 ].a)Summarise the Source: The topic for the bibliography is, “If the business lowers, its price is not necessary it will increase demand. This book summaries the interconnection between demand, profits and prices.b)Evaluate the Sources: According to the author lowering the price of a product, in expectation that it will increase the demand for product and it profitability. All sources are of the view that demand, price has an underlying relation with profit.c)Relevant: Demand of a product remains same or increases with the increase and decrease of rate depends on consumer’s willingness for that product, hence this book provides useful information to evaluate the same. d)Recent: Behaviour plays a fundamental role on demand of a product. Satisfaction achieved by customer from a product purchase is called utility in terms of economics. This book is published in 2013 hence is recent.Credible: Author Josh Kaufman explained how to increase profit in four different ways. Increase the customers: Author explains, along with existing consumers add new customers to increase the supply and demand, which is extremely credible in nature.2 | P a g e
ECO 402 - The Interconnection Between Demand, Profits and Prices_2
2.Identification and Citation of Sources: Journal: Born, B. &. 2014. Policy risk and the business cycle. Journal of Monetary Economics, 68-85[ CITATION Bor142 \l 1033 ].Summarise the Source: Demand and profit are depended on company’s demand curve.”. The source aims to critically analyse demand and its relation to profitability for a particular company.Evaluate the Sources: Strategy of the author, lowering, does not always works. Author experimented with the by analysing the sales of good and comparing the purchase from existing and new customers. The long-term customers will stick to the product if company increase the price compare to competitors.Relevant: Economist analyze the demand of product how changes in price affect demand by using Ceteris Paribus. In economics, it is not only price, which affects demand for good. Other factors like consumer income, necessity of a product also plays vital role, hence this article is relevant.Recent: Human nature termed in economics that higher the consumption lowers the satisfaction. The article is recent as it was published 2014. Credible: Increase the customers is another aspect where author explains, along with existing consumers add new customers to increase the supply and demand. This is a highly credible source of information on the topic. 3.Identification and Citation of Sources: Peer Reviewed Journal: Cachon, G. P. 2015. Price commitments with strategic consumers: Why it can be optimal to discount more frequently... than optimal. Manufacturing & Service Operations Management, 399-410[ CITATION Cac15 \l 1033 ].3 | P a g e
ECO 402 - The Interconnection Between Demand, Profits and Prices_3

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