Microeconomics Discussion Forum Unit 3 Bus 1103 PDF

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Microeconomics Discussion Forum Unit 3 Bus 1103...

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Discussion Forum Unit 3 BUS 1103

The onset of the COVID-19 pandemic forced many companies to conduct business remotely rather than in office buildings. In many cases, these companies found it more cost-effective to remain working remotely after the pandemic. Fees for building rentals, electricity, and other expenses are not present when employees work from their homes. One challenge faced by this change in business practice is communication. Employees can no longer walk across the hall, or peek over their cubicle walls, to ask for clarification from their coworker about an issue. More Sunny Day Technology took advantage of this situation to develop and market new computer software to help corporations develop effective communication between virtual employees. Use the knowledge you’ve gained in this and previous Units to answer the following questions. Support your response by providing examples and details.

How can More Sunny Day Technology Company market the right price for its new product? Having understood the situation that surround the issue of employees working remotely and took the advantage to develop a communication software. What I think the company should to market the right price is to;  Understand the cost of production, the cost of delivery and how much climb if more demands or customers come on board.  Understand the market, this means the company needs to apply pricing strategies like leveraging on the features of the software. For example, the specifications are what determines the price of smartphones in my country, I know it will be the same in other countries.  Price Ceiling: This should be considered, there should be a legal maximum price that users of the software pay, For Instance 5 users: N10,000, 10 users N18,000, 50 users 80,000 etc., this will also enable the users understand how much the company save them. For Example, Kaspersky antivirus is N28,000 and its limited to 5 computers, there is price ceiling for 10 computers, etc.  Understand the Demand and supply.

How can you comprehend the price elasticity for this type of product in the current economic market?

To comprehend the price elasticity for the product, it will be the correlation between percentage change of quantity demanded (Qd) or quantity supplied and the percentage in price. Therefore, if percentage change in quantity demanded is greater than percentage change in price it means demand or supply is elastic. If percentage change in quantity demanded is equals to percentage change in price this means demand or supply of the product is unitary. Nevertheless, if percentage change in quantity demanded is below the percentage change in price it means demand or supply is inelastic.

What or who is the competition? Why? Availability of Substitutes: This influences the elasticity of demand to a larger extent. The main reason for change in the elasticity of demand with change in price of some goods is the availability of their competing substitutes. The larger the number of close substitutes of a good available in the market, greater the elasticity for that good. For example, skype and Zoom online meetings are close substitutes.

Reference: Landsburg, Steven E. ( 2012). The Armchair Economist: Economics and Everyday Life. New York: The Free Press. specifically Section IV: How Markets Work. Tellis Gerard J. (1988). “The Price Elasticity of Selective Demand: A Meta-Analysis of Econometric Models of Sales.” Journal of Marketing Research 24:331-34...