Price elasticity of demand

Amazon buys in bulk and hence reduces the price per unity it buys, proceeding as an economy of scale. All of these aspects contribute to providing Amazon with a competitive advantage, providing cheaper prices than any of its online rivals, also providing cheap shipping, going from 3-4$ (Fig 1), half that of prices of most other online retailers. Indeed, Amazon enjoys economies of scale far beyond their online competition allowing they to provide very low prices and fast, cheap shipping. It is…

Raffinee and Opium into a high quality white soap base. The product would then be packaged using the logo of the perfume plus a Chic Soap common background. The advantages for the perfume supplier are: a guaranteed outlet for its perfumes at full retail prices; and a low cost trial route for potential customers. The advantages for Chic Soap are: the use of already established perfume concepts to promote the soap; and access to the distribution achieved by the perfumes. You are asked to identify…

2. Company Situation 2.1 Industry Situation The water purifier industry aims to improve the environmental pollution and is a field of high-income elasticity which its demand increases more than the price decrease. As the water pollution caused by industrialization becomes serious, consumers in Asia are increasingly interested in 'safe water' and the water purifier market continues to grow. It is estimated that the water purifier market will be expanded as the awareness of water pollution has…

stage. The skimming pricing involves in charging a higher price for the product for short time. This is usually carried out for new, innovative and sophisticated products. For example, when Apple recently introduced iPhone 6, it keeps a higher price; there exist big segment of customers who are willing to pay premium prices for procuring advanced level technological products. (Mallik, 2009). During the initial stage, the price elasticity of demand tends to be very low; therefore the company can…

Gluten Free Diet – A Sign of Things to Come The gluten free diet is here to stay. Consumers want more product labeling, new products, and are willing to pay the price. Going gluten free is growing in popularity and will continue to grow. The gluten free diet is also drawing more attention due to how our food is being processed. The Food and Drug Administration (FDA) has certified labels everywhere advertising, gluten free. What is gluten? According to livescience.com, “Gluten refers to the…

the year 2001 trying to re-launch its Jergens products in Lebanon. MADINA COSMETICS imports all Jergens products from Dubai, under American supervision and observation, where Jergens has a manufacturing company, which is responsible to cover the demand in all the Middle East area, so they are their suppliers. What is MADINA COSMETICS selling in the Lebanese territories? As we have mentioned before, MADINA is a franchisee of Jergens in Lebanon, and therefore sells all Jergens products which…

Competition in India for the cereal market comes mainly from Kellogg’s. They were the first major brand who introduced cereal to India and have several established product lines there including Kellogg’s Special K, Kellogg’s Chocos, and Kellogg’s Muesli. They currently hold control of the market. There are also other brands in India in the cereal market which include Gaia, Saffolalife, and Bagrrys. While Kellogg’s is the main competition in terms of known US/Canadian brands, the other 3 were…

Since education is in such demand many people go to extreme lengths to obtain one. The average student debt upon graduation is $25,250 (Cary). Many people end up paying off this debt well into their 40s and is one reason the middle-class growth is slowing. Where these rate hikes…

Economies of scale Flow 1) Examples how economies of scale is helpful, 2) New technology and economies of scale. 3) Critic of economies of scale. 4) Economies of scope(From PDF) 5) Govt initiatives to achieve economies of scale. Economies of scale: The change in long run average cost as output increases is the basis of economies of scale. A firm enjoys economies of scale in a situation where average cost goes down when output goes up while if the average cost increases with…

various stakeholders such as suppliers of raw materials, employees, tax obligation and debts owed to the financial institutions. Distributed profit represents the earning source of the business owner (Saxena 2009). The section of the earnings not distributed as interests, taxes or wages remains within the organization to fund the available investment opportunities. Maximizing profit tend to be the core objective of any business entity. Indeed, it is not an easy task for the firm’s leadership to…