The main aim of this project is to:
* To determine the demand of three (3) different drinks, Coca Cola, Orchard and Sprite, as prices fluctuate. * To determine if the theory of price elasticity of demand is applicable to the demand of Coca Cola, Orchard and Sprite. * To determine the Price Elasticity of Demand of each of the three (3) different drinks; Coca Cola, Orchard and Sprite. * To investigate how revenues change as the prices of Coca Cola, Orchard and Sprite change.
The class decided that the Price Elasticity of Demand for three drinks were to be found. The three drinks were: Coca Cola, Orchard and Sprite. I then chose to investigate whether price elasticity of demand is applicable to Coca Cola, Orchard and Sprite. A questionnaire was generated (see appendix) and was given to thirty students of Form 4 at A.S.J.A. Girls’ College San Fernando 2009/2010. This was the primary source of data used. “Primary data. This is data gained on a first-hand basis, such as an interview you have conducted”- “Tutor2u.net” The students were given one week to complete the questionnaire. Using the data collected, calculations were made. Secondary sources of data were used to analyse and interpret the data obtained by the primary source stated above. “Secondary data. This consists of data derived from other researchers.” –“Tutor2u.net”. Secondary sources of data used were websites and text books such as “Economics for CSEC” by Robert Greenwood, Terry Cook, Dave Ramsingh, Karen Radcliffe and Yvonne Harvey. (See bibliography). Personal observations were also made which is also a primary source of data.
It is a pleasure to thank those who made this project possible. Firstly, I would like to thank the almighty God for giving me the health and strength to complete this project correctly and on time. Secondly, my Economics teacher, Miss Bissoondial, for all her patience, guidance and support throughout the project. I would like to show my gratitude to all the Form 4 2009/2010 students at A.S.J.A. Girls’ College San Fernando for taking part in my questionnaire. Without them, this project would not have been possible. Finally, I would like to show my gratitude to my family and friends and anyone who supported me in any respect during the completion of this project.
“Price elasticity of demand is the degree of responsiveness demanded of a product to a change in its price.”-Edward Bahaw and Wajid Mollick-Comprehensive Economics for CSEC, in other words, Price Elasticity of Demand (PED) measures how the demand of a product reacts to a change in the price. Price elasticity of demand is calculated by: -------------------------------------------------
“PED=Percentage change in quantity demanded of the good Percentage change in price of the good " OR "PED=%∆qdX%∆pX” “Where X is the good % is percentage Δ means change in qd is the quantity demanded p is price”- Robert Greenwood, Terry Cook, Dave Ramsingh, Karen Radcliffe and Yvonne Harvey- Economics for CSEC. The change in demand may be elastic, inelastic or unitary. When the change in demand is large, that is, more than proportionate change in the price; it is elastic. “Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in the price, i.e. when:Percentage change in the quantity demandedPercentage change in the price >1”- Dr. R. Hosein and G. F. Stanlake- Longman Economics for CXC. When the change in demand is small, that is, less than proportionate change in the price; it is referred to as being inelastic. “Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price, i.e. when:Percentage change in the quantity demandedPercentage change in the price <1” -Dr. R. Hosein and G. F. Stanlake- Longman Economics for CXC. When the change in demand is equally proportionate to the change in price; it is referred to as...