Consumer Demand Analysis and Estimation Applied Problems

Dear Students, I hope you are beginning to understand the commitment that is necessary to complete this class. In fact, students tell me it is one of the most difficult classes at Ashford so a full commitment of your time over the next 6 weeks is necessary to pass BUS 640.  You will notice that I use Bing a lot, I find that Bing adds multiple videos you can watch, even if the video at hand, no longer works. which offers students multiple examples to explore.. 

Chapter 2 is another economics foundations chapter, while Chapters 3 and 4 Consumer Demand and Market Demand analysis is something that every firm needs to attend too. Case in point, one problem with many firms such as Delta and American which are merging these days, is that these firms have not examined either of these issues to the degree that Southwest and Jet Blue have. The elasticity of demand after Reaganomics when the inelastic demand curve became elastic, only Southwest and Jet Blue creating an airbus form of transportation while Delta and American still created first class flight and other miles games, instead of seeing how the elasticity of demand had changed. Hence, Delta and American were forced to merge to remain in business while Southwest and Jet Blue were filling planes for years have experienced industry wide profits.

During Week 1 we began primarily with the beginning concepts of economics. These beginning concepts are important because they allow you to build a foundation or possibly tools you will use along the way such as Marginal Benefit = Marginal Cost for the individual which will turn into Marginal Revenue = Marginal Costs for the firm. Ideas on Scarcity and Opportunity Costs both will be applied throughout the class as we go.

The expectations of applying what you will learn in the Week 2 class is the Demand portion of economics. It is that there is a UTILITY function as well as there is a DEMAND function. I use doing Assignment 2, in doing problem 2 you will be calculating how Utility or Marginal Utility is created. It has to do with consumer choices within the market and why one choice may be preferred over another. The idea of Utility is that every choice we make has a value, but understanding that value, it is important that we assess in a priority assessment which product or service may be preferred above another. Therefore you will use a formula in Utility Analysis to make that decision. As for question 2, it is that every produce or service in the market place has either an elastic or inelastic demand, as the price rises or falls elasticity asks, what is the change in quantity demanded. If the change is a lot it represents an elastic outcome but if it is small it becomes an inelastic result. You will learn how to assess the elasticity of demand of a product and then make decisions on raising price or lowering price and other assessments once you figured out the product of services elasticity value. Firms wants to know its value to help them know how to decide on its present and future product or services pricing strategies. 

Also, these same topics are also examined in both discussions. 

Chapter 3: Consumer Demand Analysis

Dear students, this chapter is a bit more difficult than some of the other chapter as we student Demand Estimation and Forecasting. I have added several videos below to help supplement the text. Consumer Behavior is where economists use models to examine how customers and business buy in the market place. Elasticity of demand deals with what constitutes an elastic vs. an inelastic demand curve and how knowing what the demand your business is, can influence how a business prices and how it conducts its business. Lastly is Demand Estimation and Forecasting is where firms try to forecast sales, production, costs and inventories to increase revenue and decrease costs. These chapters will offer you a very strong consensus of the playing field wherein the best businesses function.

Elasticity of Demand