Energy Efficiency Appliances Business Proposal
University of Phoenix
The world and economy uses various energy saving products and services to save on energy. In society, appliances are essential to homeowners and businesses to heat and cool a home or company and to provide a meal to a family after a long day. The economic analysis business proposal will discuss energy efficient appliances used in the everyday lives of the consumer. The goal of the economic analysis is to determine if a business is allocating their resources in the most effective manner (ehow.com, 2011). Energy saving appliances is preferred by the consumer because of the amount of money to be saved by using less energy. The proposal will discuss the market structure of the product, elasticity, marginal revenue, non-pricing strategies and fixed and variable cost in line with the discussed strategies.
Energy efficient appliances are considered to be a monopolistic competitive market. The economy constantly changing price elasticity is a concept that is important to implement in this electrical product does have elasticity because it will cut cost. In this particular market there are large numbers of sellers, the products has some differences among each other, and a firm can easily enter and exit the industry. Energy markets prices persuade the consumer decisions regarding how much energy to consume and whether to spend more on energy-efficient products and equipment. An increase in energy prices will effect some energy conservation in the short run; however, short-run changes in energy efficiency tend to be limited due to the long lifetimes and slow turnover of energy-using appliances and capital equipment. Energy saving companies relies a lot on promoting advertisement to the consumer to purchase the products.
Elasticity of the Product
Price elasticity of demand in a monopolistic competitive...