discussion. 100 words

I’m trying to learn for my Economics class and I’m stuck. Can you help?

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A] Profit is simply the equation of how much money you bring in versus how much money you spend to make your products. You can try to find alternatives, that you can afford, to lower the cost of production, and increase the amount of money you can bring in. However, if this doesn’t work, it can get slightly complicated. Price elasticity of demand is the term for how reactive a consumer will be to price changes. If this pizza has an elastic demand, increasing the price of the item will be a very bad idea, as less people will want to buy the pizza, and you will be bringing in less money overall. If your pizza has an inelastic or unitary demand, increasing the price will be safe for you to do. A unitary demand means that the consumption will not change with a price change, and an inelastic demand means that the demand will change in a positive way, meaning your change in quantity demanded is less than the change in price. Therefore, you would be earning more money, even if you lost a few sales. The best way to determine what to do in this scenario is to test your target consumers by changing the price slightly, as you can always change it back. However, if you do not want to risk losing any customers, your other option is to canvas your specific area and see what the relative demand is for other pizza places, and what successes and failures they have undergone when trying to change the cost of their product.

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B] There are many ways that you can increase the profitably of your store. There are many factors that can impact your profits such as your competition and customer loyalty. Look at the competition near you and see what you can do to make you stand out from them. The factor you control is how you stand out from the other stores in the area. For example lets say that the other pizza stores in the area offer deals on the weekends and but not during the week. One way to stand out from them is to offer deals during the week. Another way to increase your profit is to look at your menu and get rid of items that you do not sell a lot of so that you can get rid of some of the inventory and not waste money on it. A third way is to increase your advertising. In this day and age there are many cheap and free way to advertise your business such as on social media. You could also make a rewards program so that people are more willing to buy from you more in order to get those rewards. I wish you the best of luck with your business