Question

1. Describe price elasticity of demand for selected products and the use in marketing
2. Describe Economic policy of the Czech Republic and fulfillment of the main goals at present time

3. Describe norminal GDP in the Czech republic

4. Describe consumption and saving household in the Czech Republic

Answer 1

1. The price elasticity of demand is a measure of the degree of responsiveness of change in quantity demanded of any product with respect to the change in price levels.The price elasticity could either be inelastic,i.e change in price levels cause a smaller change in quantity demanded or elastic, i.e. change in price levels cause a relatively larger change in quantity demanded.
e.g.- Petrol - it is an example of an inelastic good as there are no substitutes for petrol. Hence, if prices go up, we don't see any relatively large change in quantity demanded.
e.g.- A soft drink can - it is an example of an elastic good as there are lots of substitutes of a soft drink brand. Hence, if prices go up, we would definitely see a switch to altertative brands.
The most important use of price elasticity of demand in marketing is pricing strategies. A producer can choose to cut prices on an elastic good, which would raise the demand for such a good(e.g.- soft drink can) and more people would like to buy the low cost good as it turns out to be a good/cheap alternative.