Elasticity

If the demand of individual buyers was vysokoelastichen, the elasticity of total market demand would exceed the unit. But, as a rule, individual demand for goods was inelastic. Therefore, the elasticity of total market demand is provided in the event that a slight decrease in prices of goods on the market attracts large groups of recent buyers who previously did not acquire the goods. Hence it is clear that one can not theoretically predict the elasticity of demand for any product, it all depends on the distribution of preferences pokupateley.Uzhe said that demand for luxury goods will nizkoelastichen at high prices. But is that the goods, which for some generations have been a luxury for the other generations are products of everyday life, and to follow-products needed. When the price drops to a level where the benefit becomes available to the general population, the demand will grow to many times and, hence, in this price range demand is elastic. Thus, in the XIX century. in France by the vast reduction in the price of cotton demand were present representatives of the working class that made the demand vysokoelastichnym.

Look:

• Japanese businessmen
  The factor of competition is coercive, forcing the producers threatened to sweep the market relentlessly to tackle the twin challenges: on the one hand, the maximum possible satisfaction of needs, on the other hand, the achievement of the lower cost in order to maintain a competitive price. This quality is called cost-optimalnym.Yaponskie entrepreneurs succeeding in global markets, the first and learned to distinguish between four levels of advancement kachestva.V 1950 [...]
• Demand for goods
  Therefore, there are cases where companies willfully foam drops even lower level of costs. The low price allows to capture a huge market space, increase production, reduce scherzhki and eventually obtain a positive profit. So did, for example, Edison, when introduced in the market nakalivaniyaBMCCTOgazovogo lighting the lamp. While the original cost of one light bulb was 1 dollar. 5 cents, he [...]
• Company Revenue
  Company Revenue is calculated as the product of sales of goods at its market price. Clearly, if demand vysokoelastichen, the decline in the foam product will be more than offset by increase in demand for the 1 (it, which would lead to an increase in revenue the company. Conversely, if demand nizkoelastichen, the decline in prices will lead to a very slight increase in the volume of demand, so that the proceeds company [...]
• Snob effect
  High elasticity of different commodities that are not necessities, such as gourmet food, more easily attributed deshevymi.Ko everything what you need to add that the general form of inversely proportional dependence may be violated at the highest, and especially at the lowest prices. In the first case, a further price increase could lead to an increase of prestige goods in the already established a narrow segment of wealthy [...]
• Effect
  At the other extreme, the price is such a paradox, as the effect of «price-quality». Most people (often wrongly) equate price with good quality and any price reduction benefits are attributed to the deterioration of its quality. It is clear that the decline in prices below a certain level may be perceived as a massive consumer of falling due to the quality of leads and not to increase the volume of demand is expected to [...]

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