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Homework 10/10/2022

Evaluate whether or not the price changes made

by Robbat
will benefit the business
engineering .

The increase in
component A and B both
price can cause

the total revenue to increase or decrease .

The
price elasticity demand for component A is inelastic .

This means that the demand for component A will

stay the same
if the price
increases Robbat niche market
.

engineering is serving a

meaning that
they only have few competitors which make it 1
a

easier to have an inelastic demand .

Therefore it is likely that

,

inelastic demands
an increase in
price will still result in an
leading
to an extension in the total revenue .

However
mnay be
though the demand inelastic still
increasing price may
even
,
,
Robbat
be a
risky business decision .

Engineering components A seems

to have
few substitutes 9ncr the
prices would make
a .

easing
farm businesses reconsider their suppliers as substitutes
prices may
be lower •
Consequently , this may lead to a decrease in total revenue .

The price elasticity demand

for component C is - 1.2 . Thus,
it is elastic .
This means that that the change in
price
lead to
change demand Although their
may a
significant in .
,

it
price elasticity demand is elastic ,
is
relatively low
meaning
it demand for
won't have a
significant change in
component c.

However
,
elastic demand also means that a small
change
in
price may have a
huge impact on the
quantity demanded
the
.

the factors that have

One
of can a
huge impact on

quantity demanded is the proportion of the farm 's income spent on

component C

income spent on
component C For .

example if ,
the
farm
businesses spend a quarter of their income on
component c.
Farm probqbly for substitutes
'

business will look .

~
This will
play a critical role in
determining
whether or not it will be beneficial for Robot

engineering .

Therefore ,
it
may lead to fewer demand

for component C.
 A will
To conclude ,
component likely increase the total revenue

for Robot
engineering .
The reason
being is that the
price demand
is inelastic which means that the quantity demanded will

stay the same .

Gt also
depends on numerous factors
such as substitutes , Branding etc .

Component B increase in
price will not beneficial
be
for Rabat
price elasticity demanded
'

their
engineering as

elastic which means that the quantity demanded

-

is -

is highly vulnerable to changes in

price Moreover , the quantity
.

demanded seems to be an
important proportion of the farm's
income .
Therefore it is
probable that their total revenue will
decrease .