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What does elasticity matter if you no longer make a profit? Isn't the only thing that could matter - apart from strategic considerations of financing a loss fo
by nosianu 9mo ago
What does elasticity matter if you no longer make a profit?
Isn't the only thing that could matter - apart from strategic considerations of financing a loss for a time - if the margins are big enough? Who wants to pay for people to take their products below the full cost of making them, apart from some investor-financed hype startups?
- senorrib 9mo ago1) You’re assuming there’s no profit to be made 2) Profit is implicitly embedded in the elasticity curve
- nosianu 9mo ago1) No, please learn to read and to comprehend. I wrote > Isn't the only thing that could matter ... if the margins are big enough 2) No, the standard price elasticity of demand curve does not directly include profits. It primarily models the relationship between price and quantity demanded.
- nasmorn 9mo agoThis is what the supply curve describes. For each individual producer there is a hard cutoff but in aggregate these are a curve
- nosianu 9mo agoNo, the standard price elasticity of demand curve does not directly include profits. It primarily models the relationship between price and quantity demanded. Supply curve??? The OP wrote "This is confirming demand is more inelastic"