Consider the Law of Demand, the Law of Supply, and the Price Elasticity of Deman

Question

Consider the Law of Demand, the Law of Supply, and the Price Elasticity of Demand. Explain how a solid understanding of these, when combined, can help a business improve its performance (c.g. increase sales revenue Combine theory with practical examples. In addition to using the textbook, please use at least one additional reference source (a respected/reputable website, as an example, would be fine) Please cite when necessary > By the due date, please provide me with a hard copy (printout) of your paper. Emailed assignments, in Microsoft Word format or PDF format, will only be accepted if you cannot make it to class on-time by the deadline date. Your paper should list your full name, and should have a cover page and bibliography (list of works cited). r Your essay should be approximately two (2) to three (3) pages in length. Your grade will be based on the overall quality of your paper (eg level of effort, spelling, grammar, organization, etc.). r This assignment must be typed and double-spaced r This is an individual assignment, and your work must be original

Explanation / Answer

Law of demand supply is used to help explain the functioning of any market . Law of demand discussed negative relationship of demand toward prices . This means the demand tends to fall when there is a rise of prices this is reason why demand curve is negatively sloped. Law of supply is just opposite to the demand because supply is positively related to the prices , producers tend to produce more when they sell it at high prices.

However different market segments like perfect competition , monopoly , oligopoly etc works different depending upon elasticity of demand which is the degree of responsiveness of both demand and supply to the prices in the market.When business entity plan to raise revenue elasticity plays a role if the demand is very elastic firms will not be able to raise revenue. A monopoly tends to increase revenue when the demand is inelastic and can earn where P>MC because they are the only set of producer.

study more on fundamental finance , economicdiscussion ,quia as reference site.

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