1.Can the elasticity of demandbe estimated by examining the answers to threekey questions?
2. Do all three answers have to be the same in order to determineelasticity?
3.Can an answer to a single question be so important that italone might override the answers to the other two?
4.What is the demand for a product likely to be if the answer to the question“Can the purchase be delayed?” is yes? What is the demandif the answer to the question is no?
5. If you applied the three questions to a luxury product,what would be the elasticity of demand for that product?
6. Can you think ofother goods with inelastic demand? Why is thedemand for those goods inelastic?
7.How do consumers react to price changes onproducts with elastic, inelastic, and unit elastic demand?
D.Based on the table above,create your own chart for the following products: anMP3 player, electricity, a gallon of milk, an ink pen, anda pound of onions. Explain.
R E A D I N G
I. Read the following text. For each gap, choose the best words A, BorC.
Our company makes wooden garden furniture - mainly tables and chairs. Sales are much higher this year because we have spent a lot on (1) …………… . First we did a survey to find out about customer (2) …………… . Then we redesigned all our (3) …………… to include the special (4) …………… that people want. Our (5) …………… included a competition in all the major gardening magazines …………… where the prize was a set of our furniture. Most importantly, we’ve made sure all our (6) …………… are very competitive because our customers want value for money.
1. A selling B distributing C marketing
2. A wants B needs C uses
3. A products B benefits C services
4. A goods B profits C features
5. A presenting B promotion C persuasion
6. A prices B costs C charges
II. Understanding main points of the text.
Read the texts and be ready to do the following assignment.
1. A. Which of these statements gives the best summary of the ideas in the text?
a) The company realizes that consumerdemand is changing. This means the companyhas to change too.
b) When prices go down forMcDonald’sproducts,consumersdemand more of them.
McDonald’s is getting a makeover. The fast-food forcehas launched its firstrestaurant redesign in 30 years.More than 6,000 locations will feature the new lookby year’s end.
Customers will have three zones to choose from,based on their dining needs.Counter seating will serveeat-and-run customers. Those looking to linger willfind soft lighting and plush chairs. Mingling teenscan cram tables together in a flexible seating area.
“It’s something McDonald’s should havedone years ago,” says restaurant analystHoward Penney. The design suggests a certaincoffee chain, but Penney says it could giveMcDonald’s an edge over fast-food rivals.
2. B. Which of these statements gives the best summary of the ideas in the text?
a)Netflix had hoped that lower prices wouldentice customers to rent more movies andthus increase its overall revenues. Thegamble paid off.
b)You can find cause-and-effect relationshipseverywhere, and they are especiallyimportant to businesses.