Elasticity Analysis

three- page paper

This is a paper on elasticity price, cross-price, income and supply elasticity.

Guidelines on your paper:

Guidelines on your paper:

Perhaps the best way to ensure that concepts are is to organize the paper by topic: 1) demand, 2) supply, 3) price elasticity, 4) cross elasticity, 5) income elasticity, 6) supply elasticity. Pick a company and break analysis down by economic topic. This is a suggestion to ensure you the concepts. (See the sample short paper dont use that company ). It will be easier you select a that only has one product line.

Within the above you do the analysis -- demand shifting right or left (by numbers of units sold or sales data are sales increasing or decreasing). What is causing the shift in demand prices of products, preference change due to advertising, income levels, number of customers, etc. What supply (shifting right or left and why) is the company adding to or reducing capacity or outsourcing.

Elasticities: price elasticity elastic or inelastic and why what makes it elastic or inelastic reasons from the lecture or text. The sign is negative as price and volume sold move in opposite directions. You wont know the precise but since you know factors that influence you will be able infer whether it elastic or inelastic. Include both the a) industry segment and b) line or branded elasticity. In general the product line will be more elastic than the industry segment.

Cross elasticity for substitutes the elasticity must be what the sign and the size? You know this information you just need to use this for the company you selected. For complements the cross sign must be?

Income elasticity you have classifications in the lecture to use such as normal, inferior.

Supply elasticity the sign is but is it low or high can dot com companies expand production relatively easy without marginal costs shooting up? The sign is positive as production and price move in same direction. Is supply elasticity elastic or inelastic and why.