Determining price levels and pricing policy

Abstract Determining charge levels and pricing policy affects revenues and consumer motivation and thus remains one of the most important elements in determining lucrativeness and market share. Part of the pricing process involves the farsightedness of agonistical reactions to outlay changes and its economic effects on depict and necessitate. This paper examines the effect of a expenditure drop-off system on harvest-time X given a hypothetical closeness situation. The paper discusses the business situation and provides an estimated change in summon with and without a competitive response given entropy trustworthy from marketing, general management and accounting. The final section concludes the paper. Business federal agency In an earlier memorandum, product management requested selective information from marketing, general management, and accounting to helper evaluate the effect of a proposed 10% price reduction on product X (see appendix A). Key data extracte d for the evaluation is as follows: marketing *Price Elasticity Calculation PriceQuantity DemandedPrice Elasticity $5.007 $4.5092.5 (absolute value) %?Q = (7-9) / ((7+9) /2)) = -2/8 = -.25 %?P = ($5.00-$4.50) / (($5.00+$4.50) /2)) = .50/$4.75 = .10 Elasticity = %?Q/%?P = -.25 / .10 = - 2.5 fictile *Therefore, if price decreases by 1%, quantity demanded increases by 2.5%. Given a price snap bean coefficient of 2.5 and a 10% price decrease, expect a 25% increase in quantity demanded (%?Q/%?P=E; E (%?P)=%?Q; 2.

5%(10%)=25%). *Marketing expects competitors will lower prices in response to a price reduction. General Management * nominal profit margin of 30% an! nually Accounting * chthonian elastic demand, given a 10% decrease in price and a 25% increase in quantity, list gross sales revenue (TSR) will increase by 35% (%?TSR = %?P + %?Q = 25% + 10% = 35%). Note, where demand is elastic, total consumer expense moves in the opposite direction to price (Lieberman, 2000). The total generate of consumer spending is also the... If you want to get a spacious essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper