Find a current event or news story which refers to changing prices. Cite your so

Question

Find a current event or news story which refers to changing prices. Cite your source with a link or cut and paste the story into your post. Write a discussion post that is 400-500 words in length which describe the changing prices in terms of how the price change might be seen from the point of view of cross elasticity. Your post should address the price change according to these considerations:

Does the change in price reflect substitute/complement goods association or normal/inferior good association?

Given this association, which other goods might be affected by this price change?

Explanation / Answer

Folllowing is the link on which the asked research will be done:-

https://www.downtoearth.org.in/news/led-bulbs-to-be-available-at-rs-10-instead-of-rs-400-47011

EXPLANATION:

The above study in the link is all about the most common and neccessary commodity that is LED light. This light when initally hit the market was availabe to the customers at the price of INR 500. This was very high price because normally a bulb was available of just INR 10 at the same time in the market. So, why should one buy the led lights?

The answer to this question is that these lights consumes very very less electricity as compared to the bulbs, cfls etc. After analysing this factor a business model was formulated by government’s Bureau of Energy Efficiency (BEE) and Energy Efficiency Services Limited (EESL, a joint venture of public sector companies of Ministry of Power) along with electricity distribution companies.

EESL would procure LED bulbs in bulk and sell them to households at Rs10. The electricity distribution companies will then repay EESL over a period of five to eight years from the savings that accrue due to use of this energy efficient lighting technology.

Light emitting diode or LED bulbs are emerging as the most energy-efficient source of lighting, with a LED bulb using only 1/10th as much energy as a normal incandescent bulb and half as much energy as a compact fluorescent lamp (CFL) to produce the same amount of light. The importance of it can be gauged from the fact that this year’s Nobel Prize in physics has been awarded to inventors of blue LEDs which made it possible to make white LED lamps. If we compare an incandescent bulb, CFL and LED, the saving potential of LED bulb is significant.

BEE, which functions under the Ministry of Power, wants to make the best use of the energy savings potential of LED lights. Consequently, it has prepared a roadmap in close cooperation with the lighting industry with three major objectives:

(a) Ensure the quality and reliability of LED lamps;
(b) Reduce the price of LED lamps, initially through large-scale public procurement and then through a labelling programme; and
(c) Facilitate awareness and demonstration of this lighting through its technology.

Declining prices
EESL has already completed a number of projects to retrofit existing streetlights with energy efficient LED streetlights as well as a 750,000 LED bulb replacement project for households in Puducherry. The bulk procurement led to reduction of cost of LED bulbs from Rs 400 to Rs 310, inclusive of warranty.

Recently, in August this year, following the signing of MOU between EESL and government of Andhra Pradesh, EESL completed the procurement process of 2 million LED bulbs. Almost the entire lighting industry participated in the bidding and the lowest quoted price was Rs 204 per LED bulb. This was almost 35 per cent less than the Puducherry LED price and about 50 per cent lower than the price at the beginning of the year.

As a result the government policy is just that making led available to every individual in the country at lower price and recovering the balance price by saving the electricity consumption.

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