COMMERCE 2MA3 : Chapter 16.docx
8 Dec 2014
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Document Summary
Method for determining price: supply and demand, cost-oriented analysis. Customary prices: prices that customer expect to pay for certain goods and services, may result in product change. Market structure with so many buyers and sellers that no single participant can significantly influence price. Well differentiated products, giving marketers some control over the prices. Relatively few sellers, each has large influences on price. Only one seller of a product exists and for which there are no close substitutes. Elasticity: measure of responsiveness of purchasers and suppliers to a change in price. Of demand: % change in quantity of a product demand / percentage change in its price. Of supply: % change in qs / percentage change in 19389 Determinants of elasticity: availability of substitutes or complements, role as complement to another product, number of business transactions conducted online, whether product is perceived as a necessity or luxury, portion of a person"s budget spent on an item.
