Business Proposal

Topics: Price elasticity of demand, Supply and demand, Elasticity Pages: 3 (1737 words) Published: November 2, 2014

Business ProposalJennifer YacovazziECO/561April 14, 2014Dennis McGuckianBusiness Proposal“Doctors of Veterinary Medicine are medical professionals, whose main obligation is protecting the health and happiness of animals and people. The first College of Veterinary Medicine in the United States was established in 1879 at Iowa State University” (Veterinary Medicine, n.d.). Before this era pets were healed by veterinarians taught in Europe or by people lacking any proper training. Veterinary medicine has advanced quickly in the last one hundred years. “Today’s veterinarians are responsible for the health of approximately 52 million dogs and 55 million cats” (Veterinary Medicine, n.d.). In this day and age there is usually a veterinary clinic on every corner or within a mile away. This field’s market structure consists of a monopolistic competition with a high amount of producers with a similar product. “Market structures in which many firms sell a different or similar product, into which entry is relatively easy, in which the firm has some control over its product prices, and in which there is considerable non-price competition” (McConnell, Brue & Flynn, 2009). With several vets in the business, there is no feeling of connection between them; every company can control its personal pricing structure without contemplating the likely responses of competing companies. The veterinary industry may recognize an uncertain rise in sales by reducing its prices, but the outcome of that action on competitor’s sales will be almost invisible and will possibly generate no reaction (McConnell, Brue & Flynn, 2009). Elasticity is a profitable term used to measure awareness of quantity to price. If a small change in price brings about a large change in quantity (i.e. a 1% change in price yields a 2% increase in the quantity demanded) the good or service is elastic (Bain & Dicks, 2014). If, however, a small change in price brings about an even smaller change in...

References: Bain, B & Dicks, M (2014, August 26). Managing Prices for Profit. Retrieved from http://www.researchgate.net/profile/Michael_Dicks/publication/256440793_Managing_Prices_for_Profit/file/60b7d52290bc821295.docx
Market Segment Specialist Program (n.d). Veterinary Medicine. Retrieved from http://www.smallbusinessnotes.com/pdf/veterinary.pdf
McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). .Economics: Principles, Problems, and Policies (18th ed.). Boston, MA: McGraw-Hill Irwin.
Olcott, M. (2012, December 19). Marginal Cost and the Pricing of Services. Retrieved from http://www.beyondindigopets.com/blog/2012/12/marginal-cost-and-the-pricing-of-services/
Pricing Veterinary Services. (n.d.) The Layers of Veterinary Financial Success. Retrieved from http://www.bdvaluation.com/documents/prices.pdf
Veterinary Economics 101. (n.d.). Retrieved from http://vbma.utscavma.org/wp-content/uploads/2008/03/vet-econ-101.pdf
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