You are an Economics consultant at Economics 4U, a small consulting firm that helps its clients to use Economics knowledge for better business decision-making. You have been approached by a new client, Mr. PD Smith, a product manufacturer, to conduct research on the price elasticity of demand, income elasticity of demand and the price elasticity of supply for his product category. The manufacturer would like to obtain a better understanding of the concept of elasticity and how to use this knowledge to make better strategic decisions about his product. Present your findings in a report that provides the following information: • Introduction Explain the purpose of your report and identify the product you have chosen (Provide a brief explanation of the product category if it is one that is not well known). (+- ¼ page) • The Concept of Elasticity Explain the general concept of elasticity and how it can be applied to improve the decisions made about a product. Price elasticity of demand Identify the price elasticity of demand coefficient for the product (based on your own research) and explain what it reveals about the product. Also identify and discuss the factors that have determined that particular elasticity coefficient. Use a graph to illustrate the relevant category of price elasticity of demand. (+- 2 pages) • Price elasticity of demand and total revenue Advise the product manufacturer as to how to increase total revenue for the product. (+- ¼ page)
You are an Economics consultant at Economics 4U, a small consulting firm that helps its clients to use
Economics knowledge for better business decision-making. You have been approached by a new
client, Mr. PD Smith, a product manufacturer, to conduct research on the
income elasticity of demand and the price elasticity of supply for his product category. The
manufacturer would like to obtain a better understanding of the concept of elasticity and how to use
this knowledge to make better strategic decisions about his product.
Present your findings in a report that provides the following information:
• Introduction
Explain the purpose of your report and identify the product you have chosen (Provide a brief
explanation of the product category if it is one that is not well known).
(+- ¼ page)
• The Concept of Elasticity
Explain the general concept of elasticity and how it can be applied to improve the decisions
made about a product.
Price elasticity of demand
Identify the price elasticity of demand coefficient for the product (based on your own
research) and explain what it reveals about the product. Also identify and discuss the factors
that have determined that particular elasticity coefficient. Use a graph to illustrate the
relevant category of price elasticity of demand.
(+- 2 pages)
• Price elasticity of demand and total revenue
Advise the product manufacturer as to how to increase total revenue for the product.
(+- ¼ page)
• Income elasticity of demand
Identify the income elasticity of demand for the product (based on your own research) and
explain what the elasticity coefficient reveals about the product.
(+- ¼ page)
• Price elasticity of supply
Identify the price elasticity of supply coefficient (based on your own research) and explain
what it means. Also explain the factors that have determined this particular elasticity
coefficient. Use a graph to illustrate the relevant category of elasticity of supply.
(+- 1 page
• Conclusion
Provide a suitable conclusion that sums up the key findings of your report.
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