2% of course grade.  Post as a

I found the week 1 bicycle case to be very interesting especially around the concepts of price elasticity of
demand.  As a technology professional, I seldom engage in conversations at work around such topics
and I found it fascinating. I had never heard of the concepts of elasticity and now knowing the definitions
of demand elastic and demand inelastic have shown me how small changes in price can have a major
impact on revenue.  However, changes in price may also mean a change in quantity sold and it’s
important to evaluate costs and how all of this impacts revenue. Just because you sell larger quantities
doesn’t always mean you are making more money.
For example: There is a great restaurant in my neighbor hood that went out of business after several
years in business.  They were always packed for lunch and dinner, and we absolutely slammed during
the weekends especially if there was an important NFL game on.  So, I was surprised when they went out
of business. Obviously, it’s a restaurant and they are notorious for going out of business and no telling
what kind of mismanagement might have gone on, but I am glad that I now have an understanding of how
to evaluate price, quantity and its impact on revenue (Miglionico, G., Guerriero, F., & Olivito, F, 2014).
I am still not sure how service companies like Uber can continue to demand higher fees for their services,
especially with surge pricing, when the quality of the service has gone down.  At least in my opinion the
quality of drivers, service and vehicles has declined over the last few years (Griffith, 2017).
All of this is very interesting and it all makes complete sense.  If the price of apples drops I may be
inclined to by more and if it goes up I may decide to go with a substitute fruit at a lower price.  So, in this
case, price has an impact on demand and is elastic. However, if the price of insulin doubles someone
with diabetes is still going to buy the drug because their life depends on it so it is inelastic (Miller &
Alberini, 2016).

I found this exercise very intriguing and enlightening. As a consumer, I react negatively to any price
increase and often consider other options or alternatives when price becomes a real issue. This exercise
allowed me to really put my managers cap on and focus more on the business aspect of things, when it
comes to price and profit. I found it enlightening that, when raising prices, and ultimately making less
deliveries (selling less of a good or service), the profit increased. It goes to show that raising prices may
cost you some customers, but in the long run (obviously depending on the specifics) you may end up

making more of a profit. So, it may be worth it to lose a few customers or make less sales since you'll be
making more money in the long run.
I thought this quote from Conrad Hilton was interesting, "The buyer is entitled to a bargain. The seller is
entitled to a profit. So there is a fine margin in between where the price is right. I have found this to be
true to this day whether dealing in paper hats, winter underwear or hotels."
Does Really Annoying want to make a ton of deliveries or do they want to make more profit? This
assessment was interesting in determining how the price variations affected the number of deliveries,
which ultimately affected the profits.