Test

In: Historical Events

Submitted By tootthfaritu1985
Words 2352
Pages 10
Eco 550
Long-Term Investment Decisions
Tiffant Lewis
Strayer University
Dr. Xiaodong Wu
ECO 550
March 9, 2014
Introduction
One of the most important long term decisions for any business relates to investment. Investment is the purchase or creation of assets with the objective of making gains in the future. Typically investment involves using financial resources to purchase a machine/building or other asset, which will then yield returns to an organization over a period of time. Planning investments involves thinking about a range of issues that have a bearing on where you ultimately decide to put your money. These issues will vary according to your particular age, circumstances and attitude to risk, and thinking about them carefully before you start making commitments will help you avoid some potentially costly mistakes.
1. Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response.
Pricing the product to reach out the current and potential customers is crucial for the managers. It is their understanding and decisions that are going to determine the success of any business. A major strategy that ensures that customers are retained with the product is to make the product inelastic employing pricing and other strategies. However, before we explain the strategies to make low-calorie microwavable food inelastic, we must understand the meaning of elasticity.
Elasticity or price elasticity is a measure of quantity demanded responds when price is changed, that is, it a measure of responsiveness of the consumer due to price change. It is measured as the ratio of the percentage change in the quantity demanded and percentage change in price. If the elasticity od demand is greater than one, we say that…...

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