1. ANSWER 4 Questions Due 8/22/2016
i. Let's discuss the types of market structures in a practical way. Please list the major wireless phone handset manufacturers and respond to the following questions -
ii. What is the market structure for wireless handset manufacturers?
iii. What pricing strategies do wireless phone handset manufacturers use?
iv. How do wireless phone makers attempt to differentiate their handset offerings?
2. Understanding whether or not a business's product or service is elastic is integral to the success of the company. Companies with high elasticity ultimately compete with other businesses on price and are required to have a high volume of sales transactions to remain solvent. Firms that are inelastic, on the other hand, have products and services that are must-haves and enjoy the luxury of setting higher prices.
Beyond prices, the elasticity of a good or service directly affects the customer retention rates of a company. Businesses often strive to sell goods or services that have inelastic demand; doing so means that customers will remain loyal and continue to purchase the good or service even in the face of a price increase.
References:
Price Elasticity (2016, August 17). Retrieved from https://www.investopedia.com: https://www.investopedia.com/terms/e/elasticity.asp
3. A response to Lou in Price Elasticity; I don't think all luxury goods are inelastic because there's are different levels to luxury, especially when it comes to goods. Luxury goods such as cloths can get highly expensive and people will pay top dollar for them but their prices also change, they go on sale. I do believe most necessities are elastic because a lot of necessities are over produced and there are so many different qualities and brands, that's it a lot to choose from.
4. Tina response to Price Elasticity, David and class, I would say that most luxury items are inelastic until the competition for these items increases forcing businesses to change or alter their prices or improve in specification or design. For example, as I sit here using my lap top, at one point this was considered a lower luxury item because many people did not have them. Many years ago I paid about $600 for this lap top that I am typing on, which was pretty expensive for me, but now you can get a lap top for around $200; the use of tablets has become more popular and smart phones perform so many activities people use these as well. Many necessities are priced more elastic because of the very competitive market. Consumers have many resources to obtain the product so pricing and availability affect these items on a grander scale. For example, someone mentioned fruits and vegetables earlier. Consumers have many resources for these items-grocery stores, farmers markets, fruit and vegetable stands, and growing their own. Stores and farmers markets need to use advertising, freshness, availability, and these days all natural in their advertising and selling techniques along with prices to draw customers in to their locations. Necessities need to be elastic because of increased competition.