Video Discussion
Video Discussion
Please view the below video link and share your thoughts on the economic concepts that you believe are applicable. In your response, provide a rationale on whether or not a firm has to possess market power in order to raise prices.
Book Reference: Brickley, J.A., Smith, C.W., & Zimmerman, J.L (2009). Managerial economics and organizational architecture (6th ed.). New York: McGraw-Hill/Irwin
Answer preview…………
There are several economic concepts found in the video, which business managers can use to manage their businesses. In the video JJ Ramberg and Bob Prosen discuss several measures, which enterprises can use to meet the needs and expectations of their customers, thereby being competitive. One of the economic phenomenon revealed in the discussion is price elasticity, which measures how the demand of a commodity or service changes due to price increases. In most instances, people lower their demand for a commodity when its price increases unless it is a basic good. However, Prosen says that firms can retain their customers despite increasing the prices of their items by not surprising them with the increase. They need to inform their clients about the increase before the implementation and also offer the reasons for the change. Upon increasing the price, firms can customize their commodities or services to allow their clients to get value for money………..
APA 349 words