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Case Study 2
Assuming that you are a Manager in a Firm, how would you go about pricing your product in
following situations:
1. Consumers demand governing your finished product is elastic, supply governing
manufacturing of your product is inelastic.
2. Consumers demand governing your finished product is inelastic, supply governing your
manufacturing of the product is elastic.
3. Both demand and supply is elastic.
4. Both demand and supply is inelastic.
Hot Points:
1. Consumers demand
2. Suppliers response
3. Price elastic.
4. Supply constraint.
What is expected from the student?
1. The student is expected to visualize a situation wherein he is expected to take a decision
under the above mentioned circumstances. He needs to justify the answer regarding his
pricing decisions.
2. Clarity is expected from the student in terms of what is meant by elastic demand and
what is meant by inelastic supply.
3. Student is expected to answer the question in terms of --- high price, moderately high
price, low price, etc.