CHARLES STURT UNIVERSITY
SYDNEY DARLINGHURST CAMPUS
LEVEL 1, 63 OXFORD STREET
DARLIGHURST NSW 2010 AUSTRALIA
ASSIGNMENT ON ECONOMICS FOR BUSINESS 511
SUBMITTED TO
KARUNAGARAN MADHAVAN
SUBMITTED BY
RUJALA SHRESTHA
STUDENT ID : 11640342
5th AUGUST ,2017
Question 1
The objective of producer is to produce the goods and services and supply to the customers in an appropriate price which is determined through price elasticity of the demand of the product. The producer is interested in price elasticity because it helps to determine the price in equilibrium point where it can make profit to producers and satisfy the customers toward that consumed product.
The total revenue is calculated by multiplying the price per unit of the product with …show more content…
It indicates small price change leads to large change in quantity demand for cloth. Before price change the total revenue of cloth is $480 and after reduction in price of cloth ,demand goes up to 28 unit from 16 unit which results total revenue to $560.Here price cut increases total revenue, it is called elastic demand.
Figure: Inelastic Demand
The figure shows that higher deduction in train fare does not result the higher decrement of the demand of travelling by train. The total revenue is decreased though there is reduction in fare of train.If price cut decreases total revenue it is called inelastic demand.
It is important to consider the price elasticity of the demand of the product along with selling price of the product which result maximization of total revenue. Since product price will determine the quantity demand and they affect the total revenue of the producer.
Question 2
Trade means to buy and sell of products in the market. People produce one good and trade with others to purchase other essential goods in the market. Thus trade is beneficial to all participants, i.e. buyers and sellers who exchange the goods and services into the
SYDNEY DARLINGHURST CAMPUS
LEVEL 1, 63 OXFORD STREET
DARLIGHURST NSW 2010 AUSTRALIA
ASSIGNMENT ON ECONOMICS FOR BUSINESS 511
SUBMITTED TO
KARUNAGARAN MADHAVAN
SUBMITTED BY
RUJALA SHRESTHA
STUDENT ID : 11640342
5th AUGUST ,2017
Question 1
The objective of producer is to produce the goods and services and supply to the customers in an appropriate price which is determined through price elasticity of the demand of the product. The producer is interested in price elasticity because it helps to determine the price in equilibrium point where it can make profit to producers and satisfy the customers toward that consumed product.
The total revenue is calculated by multiplying the price per unit of the product with …show more content…
It indicates small price change leads to large change in quantity demand for cloth. Before price change the total revenue of cloth is $480 and after reduction in price of cloth ,demand goes up to 28 unit from 16 unit which results total revenue to $560.Here price cut increases total revenue, it is called elastic demand.
Figure: Inelastic Demand
The figure shows that higher deduction in train fare does not result the higher decrement of the demand of travelling by train. The total revenue is decreased though there is reduction in fare of train.If price cut decreases total revenue it is called inelastic demand.
It is important to consider the price elasticity of the demand of the product along with selling price of the product which result maximization of total revenue. Since product price will determine the quantity demand and they affect the total revenue of the producer.
Question 2
Trade means to buy and sell of products in the market. People produce one good and trade with others to purchase other essential goods in the market. Thus trade is beneficial to all participants, i.e. buyers and sellers who exchange the goods and services into the