Economics for Decision-Making: A Meeting
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Details: As the research starts to come in about your expansion opportunities abroad, the marketing department has discovered that the price elasticity for CPI's products in Brazil is expected to be much greater than in current markets served. Separately, your CFO sent you an e-mail earlier in the week stating that depending on how much business CPI does abroad, the firm would expose 5 to 20 percent of revenue to currency fluctuations (the Real and Euro are the currencies for Brazil and Germany respectively).
Both of these issues are of concern to you, so you decide to have a meeting with the VP of Marketing and the CFO. Explain the differences among inelastic, elastic, and unitary price elasticity to the VP and CFO. Then, what questions would you ask? What recommendations would you have for the CFO?
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Solution Summary
Almost 800 words on elasticity and expansion opportunities for a meeting with higher-ups.
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Phase 3 Discussion Board
Details: As the research starts to come in about your expansion opportunities abroad, the marketing department has discovered that the price elasticity for CPI's products in Brazil is expected to be much greater than in current markets served. Separately, your CFO sent you an e-mail earlier in the week stating that depending on how much business CPI does abroad, the firm would expose 5 to 20 percent of revenue to currency fluctuations (the Real and Euro are the currencies for Brazil and Germany respectively).
Both of these issues are of concern to you, so you decide to have a meeting with the VP of Marketing and the CFO. Explain the differences among inelastic, elastic, and unitary price elasticity to the VP and CFO. Then, what questions would you ask? What recommendations would you have for the CFO?
Demand
Demand is that quantity of a good that consumers are not only willing to buy but also have the capacity to buy at the given price.
Elasticity
Elasticity is the proportional change in one variable relative to the proportion change in another variable. The concept of elasticity can be used whenever there is a cause and effect relationship. The causal variable is often called the ...
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