Analysis Simulation on Elasticity and Demand - 930 Words

Analyzing Elasticity of Demand Simulation DigiVal DigiVal Plus Manufacturing Company sells a range of computers, notebook computers, desktop computers, high-end servers and has a market share of 22 percent, along with another office in the U.K. with sales in Europe at 30 percent total sales. There are three team members who are qualified to get the companies market back on track. CEO, B.J. Downey, who targets the strategies, goals and revenue targets has steered DigiVal for the past 12 years. George Hernandez, Group Economist, who handles the analysis of economic trends in the market, Linda Jacobs, Product Manager, contributed vision and strategies within the company and Brent Richardson, Product Manager, that has a strong background†¦show more content†¦They would find gas station with a cheaper price. If the station lowered the amount of gasoline by 10% or 15%, there would be a line wrapped around the corner of that gas station. People would go out of their way to buy cheap gas. Total receipts and total revenue are determined by multiplying the price of the gas by the quantity sold. If the demand for a product is elastic, the amount consumer s buy will go up and the price will be lowered, but if inelastic, a lower price would mean a small increase in the quantity demanded. It would not be enough if sales increased. Substitutes and Compliments Gas cannot be substituted. For food, which is a good, can be substituted. If the price of fish and butter go up, buyers can switch to chicken and margarine. Small changes in the price of a product will cause people to switch from one product to the other. When quantity like this sells in a particular store or small store, the quantity changes drastically by the impact of store receipts, which tends to make the demand elastic. The more changes in substitutes the more elastic it becomes, the less substitutes for that particular product, the more inelastic the demand becomes. References: Colander: Economics, Fifth Edition, Microeconomics II, Describing Supply and Demand: Elasticity s Gary E.Show MoreRelatedSupply and Demand Simulation Paper886 Words   |  4 PagesSupply and Demand Simulation Paper ECO/365 Week 2 Individual Assignment February 25, 2013 Supply and Demand The analysis will identify two microeconomics and two macroeconomics principles or concepts from the simulation, and explain why each principle or concept is in the category of macroeconomics or microeconomics. The analysis will identify at least one shift of the supply curve, and one shift of the demand curve from the simulation and what causes the shifts. 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