Salma Ahmed
English Lit. GCSE Student
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Explain how an understanding of elasticity can help a firm selling cigarettes
- Words:
- 755
- Submitted:
- Wed Oct 20 2004
Have a little read: ... Explain how and understanding of elasticity can help a firm selling cigarettes For every business in the present world it is necessary they have a good understanding of elascticity because this can help a business predict what to do to get maximum revenue and profit. There are 3 main types of elasticity: Price Elasticity of Demand (PED) Income Elasticity of Demand (YED) And Cross Price Elasticity of Demand (CPED) For my example I am going to look at Benson and Hedges cigarettes. To determine the elasticity of the supply or demand curves, we can use this simple equation: Elasticity = (% change in quantity / % change in price) If elasticity is greater than or equal to 1, the curve is considered to be elastic. If it is less than 1, the curve is said to be inelastic. The demand curve is a negative slope, and, if there is a large decrease in the quantity
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