Analysis of Price, Demand, and Profit: Annotated Bibliography

This annotated bibliography examines the relationship between price, demand, and profit in a business context. It analyzes several sources, including a book by Christensen & Raynor, journal articles by Born and Cachon, a magazine article by Siano, and a website from the IMF. The sources explore how price changes affect demand and profitability, considering factors such as consumer behavior, market dynamics, and pricing strategies. The bibliography evaluates the relevance, recency, and credibility of each source, highlighting the complex interplay between price elasticity, consumer income, and the overall impact on business outcomes. The conclusion suggests a connection between price, demand, and profit, derived from the various sources analyzed.

Annotated Bibliography: If a business drops its price will it always increase
demand-and will it always make more profit?
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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 (Christensen, 2013).
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.
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2. Identification and Citation of Sources:
Journal: Born, B. &. 2014. Policy risk and the business cycle. Journal of Monetary
Economics, 68-85 (Born, 2014).
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 (Cachon, 2015).
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Summarise the Source: All the sources includes examples from various companies
have been included and then analysed for arriving at relationship established for the
same.
Evaluate the Sources: In contrast, new existing customers will shift to the company
selling same product at a lower price. There it is not always the lowering the price
increase the sales and profit. Demand curve of a business is highly depended on
prices.
Relevant: Other factors like consumer income, necessity of a product also plays vital
role. Demand for a product also changes with the change in price of competitors,
hence this article is relevant in nature.
Recent: Product demand increase or decrease depending on the income of a
consumers. This article is recent as it was published in 2015.
Credible: Increase the sell s: Josh trying to explain, offer clients a complimentary, so
that once they taste they will tend to buy new product, which will finally increase the
sales and overall profit. the article is highly credible in nature.
4. Identification and Citation of Sources:
Magazine: Siano, P. 2014. Demand response and smart grids—A survey. . Renewable and
Sustainable Energy Reviews, 461-478 (Siano, 2014).
Summarise the Source: All the sources includes examples from various companies
have been included and then analysed for arriving at relationship established for the
increase in price and demand and profit.
Evaluate the Sources: Demand curve of a business is highly depended on prices. For
instance as per author if demand for a product remains tentative equal like sale before
increase in rate.
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Relevant: All together, there are six factors, which can change demand and
profitability. They are increase of product use, increase of population, peoples buying
capacity i.e. income, competitors increase the rate, future prediction of more demand
for a product. This article is relevant hence has made significant contribution to the
study.
Recent: All sources offers, most recent authentic genuine source of information for
the topic. This magazine is not very recent but had been published in 2014.
Credible: Increase frequency of transaction, leads to convince consumers to visit
more to buy products rather than from substitutes. This source is highly credible in
nature.
5. Identification and Citation of Sources:
Website:http://www.imf.org/external/pubs/ft/fandd/basics/suppdem.htm
(www.imf.org, Retrieeved on 17th August 2017).
Summarise the Source: Price and demand and profit are essentials part of
economics. If price increases, demand decreases if not necessity product and vice a
versa.
Evaluate the Sources: company will have inelastic demand curve, which proves the
monopoly and brand name and quality of a company’s product which does not affect
profit on increasing prices.
Relevant: all sources are relevant for analyse and arriving at conclusion for the topic
and also gain fundamental insights into basic concepts. This is a very relevant source
of information.
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Recent: It was written in the 2013, which forms a recent aspect on the topic.
Credible: Increase price. Josh Kaufman theory and assumption describe that if the
company raise the price of a product, sales will be more, which will directly hit the
profit of a company.
Josh Kaufman explains how the increase in price over period will increase the sales power.
The higher the price of a product proves higher the demand of product. Consumer nature is to
run behind the things, which has more rates, rather than of low cost due to assumption it is
more reliable brand compare to cheaper product. This is pricing power. Deriving from the
above it can be justified that the information obtained from various peer reviewed journals
and other websites are verified and credible in nature. Only the credibility of the magazine
could not be established.
Conclusion: Profit is affected by means of raising of prices, when demand is set to increase.
Deriving from various sources it can be established that a connection can be made with price,
demands and profits.
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Bibliography
Born, B. &. 2014. Policy risk and the business cycle. Journal of Monetary Economics, 68-85.
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.
Christensen, C. &. 2013. The innovator's solution: Creating and sustaining successful growth.
The innovator's solution: Creating and sustaining successful growth.
Siano, P. 2014. Demand response and smart grids—A survey. . Renewable and Sustainable
Energy Reviews, 461-478.
www.imf.org. (Retrieeved on 17th August 2017). Demand against Price.
http://www.imf.org/external/pubs/ft/fandd/basics/suppdem.htm.
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