MBAV 6053
Factors involved in the decision
Columbia Southern University
MBAV 6053 Economics for Managers
Abstract
This article is dicussing issues that the managers often encounter when they manage the
organization. Elastic in demand, sunk cost, opportunity cost, deontology and consequentialism
are important factors effect to decision. Before making a decision, the manager needs to
distinguish with factors they need to be consider or they need to be ignored. Knowing these
principles will help managers make better choices. Resources are limited and the managers will
need to know the trade-off for one thing better. Identify opportunity cost for wise decisions and
help managers avoid sunk cost trap. Understanding the elasticity of demand helps the managers
grasp the reality of the market. The example figures in this article will illustrate in detail so that
we can have a clearer view of the role of the managers in the current economic context.
Factors involved in the decision
The responsiveness of consumers to a change in the price of a product is measured by the price
elasticity of demand [ CITATION Den19 \l 1033 ]. Elastic in demand, sunk cost, opportunity
cost, deontological and consequentialism are linked together. When one factor changes, it affects
the other. This change affects the market over a certain period of time and it also changes the
profit of the manufacturer and behavior of consumer as well. The selling price has an important
impact of transaction, but it also depends on elasticity of function demand. Assuming, the price
of branded quality tea increases 15%, from $4.28 to $6.42 and the demand of tea decrease
16.8%. The elasticity of tea is -1.08, indicating the price of tea is elastic. If the price of tea
increased, consumers can easily use product with close substitutes, such as: soft drink, coffee,
Factors involved in the decision
Columbia Southern University
MBAV 6053 Economics for Managers
Abstract
This article is dicussing issues that the managers often encounter when they manage the
organization. Elastic in demand, sunk cost, opportunity cost, deontology and consequentialism
are important factors effect to decision. Before making a decision, the manager needs to
distinguish with factors they need to be consider or they need to be ignored. Knowing these
principles will help managers make better choices. Resources are limited and the managers will
need to know the trade-off for one thing better. Identify opportunity cost for wise decisions and
help managers avoid sunk cost trap. Understanding the elasticity of demand helps the managers
grasp the reality of the market. The example figures in this article will illustrate in detail so that
we can have a clearer view of the role of the managers in the current economic context.
Factors involved in the decision
The responsiveness of consumers to a change in the price of a product is measured by the price
elasticity of demand [ CITATION Den19 \l 1033 ]. Elastic in demand, sunk cost, opportunity
cost, deontological and consequentialism are linked together. When one factor changes, it affects
the other. This change affects the market over a certain period of time and it also changes the
profit of the manufacturer and behavior of consumer as well. The selling price has an important
impact of transaction, but it also depends on elasticity of function demand. Assuming, the price
of branded quality tea increases 15%, from $4.28 to $6.42 and the demand of tea decrease
16.8%. The elasticity of tea is -1.08, indicating the price of tea is elastic. If the price of tea
increased, consumers can easily use product with close substitutes, such as: soft drink, coffee,
