Running Head: ECONOMICS

Economics

Name

Institution Affiliation

Date
ECONOMICS 2

1) There is a wide connection between elasticity of demand as well as total revenue. The price

elasticity of demand usually has an effect of change in price for services or goods to the

demand of the same service or good. This has a great effect on the total revenue of the

business. Revenue is defined as the money a company generates from the sales it has. This

can be obtained by the number of units sold multiplied by the selling price of each unit.

Hence, if there is a change in the price of a certain good, there will be an impact on the direct

revenue the company obtains (Helmold, 2020).

Giving an example of a product with this responsiveness is Gasoline. The chart below

provides the responsiveness of gasoline prices on the effect of car travel demand.

Source: U.S. Energy Information Administration for the period 1991 to 2012.

Most of the price elasticities for Gasoline are negative. This means that an increase in price

lowers the demand.

ECONOMICS 3

2) As the Controller of Accounts, maximizing profits is one of the key objectives in business. I

would adopt the following steps that would gear in profit maximization in the business.

a) The first thing is to convert one-time customers to frequent customers. My division and I

would use strategies to gain customer interests in the goods or services; he or she obtains

from the business (Lakin & Scheubel, 2017). Frequent clients usually buy or spend more than

new customers in a business. By keeping in touch with them, offering discounts on consumer

products and credit services to frequent customers would attract more customers hence

increasing revenue.

b) Secondly, it is dropping or cutting down low perfumers on goods and services. I would

assess various goods which would not generate profit by preparing an income statement for

each good. This will help us know how much profit and expense is distributed to each good

or service.

c) Thirdly, I would remove non-essential tasks. Each employee in the various division would

assess the various tasks held to them and would see whether the task is time-consuming, that

takes more time to do other tasks which do not account to profit-making. For example, the

use of more time for customer service would be better as it increases the value of purchases.

d) Lastly, we would maximize profits by expanding the business to a broader market. Through

creating blogs, adverts, sales promotion as well as offering corporate social responsibility

activities, I believe that the business would get more customer exposure hence broadening

the market.
ECONOMICS 4

References.

Helmold, M. (2020). Pricing Elements and Price Elasticity. In Total Revenue Management

(TRM) (pp. 13-27). Springer, Cham.

Lakin, N., & Scheubel, V. (2017). Corporate community involvement: The definitive guide to

maximizing your business' societal engagement. Routledge.

U.S. Energy Information Administration: Annual Energy Outlook 2012: Retrieved From:

https://www.eia.gov/outlooks/aeo/pdf/0383(2012).pdf