Eduardo DeulofeuReplyUNIT 1 – DISCUSSION BOARDFri 3/22/2024 4:01 PMLikeUnit 1 – Discussion Board Like PostFlagUnit 1 – Discussion Board Flag PostHello Class,I think that price elasticity of demand is a crucial indicator in understanding how the quantity demanded of a product changes in response to a price change. It varies significantly across different products based on factors such as necessity, availability of substitutes, and consumer preferences. Let’s examine salt, a product with relatively inelastic demand, and smartphones, which have a more elastic demand, to illustrate how firms can leverage this information.Salt, a basic necessity in cooking, has an inelastic demand. Its consumption does not significantly decrease with a price increase because it is essential and lacks close substitutes. Firms selling salt can benefit from understanding its inelastic demand by maintaining steady production and potentially increasing prices during high demand without fearing a substantial drop in sales volume. This strategy can be particularly effective in ensuring profitability, as the market for salt is typically stable and consumers are less price-sensitive.In contrast, smartphones exhibit elastic demand. The market is saturated with various brands and models, and consumers often view smartphones as a luxury rather than a necessity. This elasticity suggests that consumers are more sensitive to price changes and might delay purchases, seek alternatives, or switch brands based on price fluctuations. Firms in the smartphone industry can use this knowledge to their advantage by employing competitive pricing strategies, introducing new features to justify premium prices, or offering discounts and promotions to boost demand during low sales periods. Moreover, understanding elasticity can guide firms in segmenting the market and targeting specific consumer groups with tailored products and pricing strategies to maximize sales and profits.In summary, understanding the price elasticity of demand for their products enables firms to make strategic decisions about pricing, production, and marketing. By aligning their strategies with consumer sensitivity to price changes, firms can optimize profits, enhance customer satisfaction, and achieve a competitive edge in the market.ReplyMark as UnreadMichael Wayne SimienReplyUNIT 1 – DISCUSSION BOARDWed 3/20/2024 6:34 PMLikeUnit 1 – Discussion Board Like PostFlagUnit 1 – Discussion Board Flag PostHello Class, and Dr. Theodore, I’m Michael. Hope everyone is doing well, and staying safe. Assignment Details Global mask was a price elasticity of demand when the pandemic hit in 2020, and scared the world, and shook the country in fear. The fact that people were losing their lives at a rapid pace was frightening. So, when the world took cover to keep from getting COVID, the surgical mask became a high demand for fighting against the virus. Which met more production of masks. Every business was wearing masks to protect themselves at the place of business, and became the new normal. Before the COVID-19 pandemic, surgical mask had a revenue of 81 million in sales. But, when COVID hit in 2020, and the world panic for safety surgical masks was at a price elasticities demand, where companies could take advantage of their firm by, raising prices. During the pandemic, the earnings for surgical masks increased to 129 billion dollars per month in 2020 during the COVID-19 pandemic. Companies use price, to there the highest advantages raising prices. Sanitizer was at a price elasticities demand when more people during COVID-19 starting buying the product at a fast pace., keeping companies safe from the virus that was spreading throughout the country. This gave sanitizer factories the most advantages that they ever had. So, many of these companies raised prices do to the demand for safety precautions, and many had no choice but, to accept. This led to the sanitizer factory revenue increasing to 1.3 billion dollars in 52 weeks, maneuvering prices. These companies still are making money because, COVID-19 hasn’t fully out of the country. RefencesGlobal Mask Sales Surged 30-Fold During the Pandemic by Felix Richter, Jan 12, 2023 U.S. face masks markethttps://www.google.com/url?sa=t&source=web&rct=j&o…Lopez, T.K., Jones, K., Roseberry-Lincoln, A. et al. Adult and children’s use of hand sanitizer during a pandemic – an observational study. J Expo Sci Environ Epidemiol 33, 1004–1012 (2023). https://doi.org/10.1038/s41370-022-00479-w