Analysis of Elasticity and the Theory of Consumer Choice

Analysis of Elasticity and the Theory of Consumer Choice Economics calculate elasticity and use the consumer choice theory to determine marketability of various commodities. Elasticity differs among items since some items are more essential to consumers than others are (Davis). The consumer choice theory is essential in determining the most attractive markets. However, it has certain shortcomings.Advertising We will write a custom essay sample on Analysis of Elasticity and the Theory of Consumer Choice specifically for you for only $16.05 $11/page Learn More The difference in elasticity is caused by the variations in the level of demand for different products. Goods and services that are necessities are insensitive to cost alterations as consumers usually purchase these items regardless of cost adjustments. Price increase of an item that is less of a necessity puts off more customers since the opportunity cost of acquiring the items becomes too high. A product is highly elastic if an insignificant alteration in it s price leads to an acute change in the supply or demand of the product. Commonly, such items are accessible in the market at all times, but consumers rarely purchase them. Conversely, an inelastic commodity is one in which price alterations may only lead to modest changes in the quality supplied and demanded. These commodities are those that tend to be more of a necessity to the customer in his/her everyday life (Moffatt). The equation for finding elasticity is percentage change of the amount of products demanded for divided by the percentage change in cost. If elasticity is equal to or greater than one, the good/service is elastic. Economists say that the higher the rate of elasticity, the lower the market for the product when the price increases. The opposite is also true. Economists and business people use the formula to understand how sensitive the demand for particular goods/services is to changes in price (Hubbard 82). To determine elasticity of goods and services, economists analysis demand curves. When the amount of products demanded diminishes significantly due to a negligible adjustment in cost, the demand curve becomes flat, and this shows that the demand for the product is elastic. On the other hand, when the curve is upright the demand is inelastic, as quantity adjusts modestly with massive alteration in cost. Elasticity of supply functions in a similar manner. When changes in supply result into a massive change in quantity supplied, the supply curve flattens and the commodity is elastic. In this case, the elasticity is higher or equal to one (Davis). However, if a substantial change in price does not have a major impact in the quantity supplied, the curve becomes steeper. Its elasticity becomes less than one. The theory of consumer choice is another vital trading tool. It is based on the hypothesis of utility and marginal utility. Economists use the terminology utility to express the contentment resulting from the consumption of a product. They say that consumers act sensibly while choosing the preferred products to exploit total utility. According to the theory, consumers always take into consideration four main factors.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More First, they consider how much satisfaction they derive from purchasing and subsequently consuming an extra unit of a product. Next, they consider the amount of money that they have to pay to acquire the product and ensure they do not lose their money. Moreover, they consider the degree of satisfaction they can derive from consuming substitute products. Finally, they evaluate the prices of the substitute products (Theory of Consumer Choice†). The experts use the term marginal utility to explain change in satisfaction that results from the consumption of each additional product. The theory of diminishing marginal utility articulates that the marginal u tility resulting from consuming a good/service decreases as the consumption of that product increases. The theory of consumer choice states that a rational consumer spends on his/her earnings in a manner that maximizes the total utility arising from all commodities consumed. For example, in case a customer intends to buy one good out of two differently priced products, total utility will be achieved when the satisfaction arising from commodity A is equal to the satisfaction arising from commodity B. In this case, the total marginal utility of A and B becomes equals to that of another similar good. Therefore, when the price of product A diminishes, the equality becomes an inequality and the consumer chooses a cheaper preference. The consumer will buy more of the product, if he/she receives more utility from it. The theory is essential as it forecasts demand and supply (Theory of Consumer Choice†). However, the theory also faces criticism. Some economists assert that it is not p ossible to measure utility impartially, as there are no systems for doing the work. Moreover, they have reservations regarding the hypothesis of rational behavior among consumers. They say consumers do not have all the information on the products available in the market and therefore cannot make rational decisions (Moffatt). The consumer choice theory, however, is a useful economic tool for determining appropriate trading patterns. Elasticity forecasts levels of demand and supply. The elasticity formula is easy to use, and all entrepreneurs can use it to improve their understanding of their markets. Davis, Marc. Microeconomics: Introduction | Investopedia. Investopedia Educating the world about finance. n.p., n.d. Web.Advertising We will write a custom essay sample on Analysis of Elasticity and the Theory of Consumer Choice specifically for you for only $16.05 $11/page Learn More Hubbard, R. Glenn, and A. P., Brien. Microeconomics. Upper Saddle River, N.J .: Pearson Prentice Hall, 2006. Print. Moffatt, Mike . Price Elasticity of Demand. Economics at About.com. N.p., n.d. Web. Theory of Consumer Choice indifference curves, consumers optimal choice. Business Economics | Introduction to Basic Economics. n.p., n.d. Web.

How to Write a Letter of Continued Interest

How to Write a Letter of Continued Interest The college admissions process can be cruel, especially to those students who find themselves in limbo because theyve been deferred or waitlisted. This frustrating status tells you that the school thought you were a strong enough applicant to admit, but you werent among the first round of top-choice candidates. As a result, youre left waiting to find out what your future might hold. On the plus side, you havent been rejected, and you can often take action to improve your chances of getting off the waitlist and eventually being admitted. What to Include in a Letter of Continued Interest Assuming the college explicitly states that you shouldnt write, your first step when you find that youve been deferred or waitlisted should be to write a letter of continued interest. The tips below can help guide you as you craft your letter. Address your letter to the admissions officer assigned to you, or the Director of Admissions. In most cases, youll be writing to the person who sent you the waitlist or deferral letter. An opening such as To Whom it May Concern is impersonal and will make your message seem generic and cold.Restate your interest in attending the college, and give a couple of specific reasons  why  you want to attend. Is there a program that excites you? Did you visit the campus and feel the college was a good match? Does the college line up with your professional and personal goals in a specific way?If the college is your first choice school, dont be shy about telling this to the admissions committee. When colleges give offers of admission, they want students to accept those offers. A strong yield  makes the school look good and helps the admissions staff meet their enrollment goals efficiently.Let the college know if you  have new and significant information to add to your application. Since you originally applied, did you get new and better SAT/ACT scores? Did you win any meaningful awards or honors? Has your GPA gone up? Dont include trivial information, but dont hesitate to highlight new accomplishments. Thank the admissions folks for taking the time to review your application materials.Make sure you include current contact information so that the college can reach you. Waitlist activity can occur in the summer, so make sure the college can contact you even if you are traveling.   To see what an effective letter might look like, here are a couple of sample  letters of continued interest. Notice that they are not long. You dont want to impose too much on the time of the admissions staff. What to Not Include in a Letter of Continued Interest There are various things you shouldnt include a letter of continued interest. This include: Anger or Frustration: You may feel both of these things, but keep your letter positive. Show that you are mature enough to handle disappointment with a level head.Presumption: If you write as if you are assuming youll get off the waitlist, you are likely to come off as arrogant.Desperation: You wont be improving your chances if you tell the college that you have no other options, or that youll die if you dont get in. Highlight your continued interest, not your unenviable position on the waitlist. General Guidelines for a Letter of Continued Interest Make sure the college accepts letters of continued interest. If your waitlist or deferral letter states that you should send no further materials, you should respect the colleges wish and show that you know how to follow directions.Send the letter as soon as you learn that you have been deferred or waitlisted. Your promptness helps show your eagerness to attend (demonstrated interest is essential!), and some schools start admitting students from their waitlists soon after creating lists.Keep the letter to a single page. It shouldnt ever take more space than that to state your continued interest, and you should be respectful of the busy schedules of the admissions staff.A physical letter isnt always the best option. Read the admissions website to see if the college tends to ask for materials electronically or physically. An old-school paper letter looks nice and is easy to slip into an applicants physical file, but if a college is handling all application materials electronically, som eone will have the inconvenience of scanning your paper letter to include it in your file. Attend to grammar, style, and presentation. If your letter of continued interest looks like it was dashed off in two minutes and written by a third-grader, youll be hurting your chances, not helping them. A Final Word Will your letter of continued interest improve your chances of getting in? It might. At the same time, you should be realistic. In most cases, the odds of getting off a waitlist are not in your favor. But when a college does turn to the waitlist, or when the school looks at the general applicant pool in the case of deferral, demonstrated interest matters. Your letter of continued interest is no magic admission bullet, but it certainly can play a positive role in the process.