Managerial economics Essay Example | Topics and Well Written Essays - 1250 words

Managerial economics - Essay Example Mechanism of Demand Within a market framework, demand for any commodity or good or service is generally referred to as an amount which will be purchased at a particular price during a particular period of time. Now the law of demand can be also incorporated so as to analyze the relationship between price and quantity. In the domain of microeconomics or price theory it can be stated that the other things remaining constant (Cetaris Paribus) the quantity demanded of a commodity increases when its price decreases and decreases when its price rises (normal commodity and the exceptions of the law of demand are eradicated in this case and is not of relevance) (Arnold, 2010, p.56). So it can be stated that there exists a negative or inverse relationship between price and quantity. The negative association between price and quantity can be described as This negative relationship between price and quantity can be represented with the help of a linear demand curve by taking a smooth relation b etween price and quantity which can be depicted as follows: The above relationship can be depicted by the help of a two-dimensional graph with price and quantity axis. Fig. ... the quantity supplied rises with the rise in price and falls with the fall in price as in there is a direct relationship between price and quantity (Tucker, 2010Â  , p.57). The supply function is given by: The relation between price and quantity can be shown with a short mathematical exercise and a graph. Fig. 2 The Supply Curve (Tucker, 2010Â  , p.57). The diagram above it is the supply curve and it has a positive intercept which ‘a’ is taken from both the (2) and (4). The market equilibrium is said to achieve when the demand equals the supply curve and the intersection between the demand and supply curve gives us the equilibrium price on the vertical axis and quantity on the horizontal axis as depicted in the previous graphs. The answers to the questions can be explained with respect to diagrammatic framework which would be representing both demand and supply framework with equilibrium and the conditions deviating from the equilibrium. Fig. 3 The calculated Demand Cu rve Fig. 4 The calculated Supply Curve The calculated demand curve and the calculated supply curve are shown in the diagrams 3 and 4. Now the intersecting point of the demand and the supply curve would be giving us the equilibrium quantity of the pizzas in the market. In this particular case $ 6 is the equilibrium price and 81 quantities of pizza is the equilibrium quantity as at $ 6, 81 units of pizza are demanded and supplied and at this point there is no excess demand or excess supply existent in the market. The equilibrium condition can be depicted with the help of the following diagram: Fig.5 The market equilibrium and adjustment procedure In the above figure, the equilibrium price is $ 4 and the equilibrium quantity is given

Marketing 100 Research Paper Example | Topics and Well Written Essays - 2000 words

Marketing 100 - Research Paper Example Sanitarium claims that its Weet-Bix wheat biscuits are an ideal breakfast food because it fulfills calorie needs and energy requirements. Indeed, the major ingredients include fibre, fat and sugar (low), vitamins, milk, zinc, magnesium, folate and iron (Product Review, 2010). The Sanitarium Company offers its products at all retail stores, grocery shops and online stores for convenience of buyers across Australia and New Zealand. The company uses competitive pricing strategy because of highly competitive nature of food and confectionary industry. The prices range from $1 – 10 because of differences in flavours, sizing and quantity. In simple words, the prices will remain competitive because there is greater threat of substitute products from existing companies such as Kelloggs, Uncle Toys, House brands, Nestle and other small scale producers and marketers. It is worthwhile to mention that Kelloggs has been marketing Nutri-grain, Cheerios, Coco Pops and Nesquik in Australian market. In conclusion, there is stiff competition that keeps prices affordable for consumers from different social classes (Demo Design Report, 2006). The Sanitarium Company has already expanded its operations all across Australia because of an efficient distribution and supply chain network. The company supplies its product to all retail and commercial stores, grocery houses, medicine shops and online stores. In this way, Sanitarium has increased market reach of Weet-Bix product and has attracted maximum customers towards its brand. In addition, the company focuses on efficient supply because the Utility of Place and Time play a vital role in success of any food product. Sanitarium has inducted a new eCargo system to ensure flexibility in distribution channels, to reduce human error and to facilitate record keeping, freight and inventory management (Ecargo Report, 2010). The company