An Investigation into the P.e.d, Y.e.d and X.p.e.d of The Sony Playstat

An Investigation into the P.e.d, Y.e.d and X.p.e.d of The Sony Playstation1 I have chosen the Sony Playstation1 as my product. The Playstation1 went on sale in 1995 in Britain. It quickly sold all told its stock completely due to very high adopt, as it was a new thing at the time. It cost 200 in the shops and stayed at this equipment casualty for a whole two years however demand started to decrease cursorily after this. This could be because of new arrivals to the console world i.e. Nintendo 64. So they dropped their charge to 130 and again huge demand for the product begun and they sold out. provided after a year, demand for the Playstation1 dropped, so they dropped their price again mastered to 100. There was still little demand, so they dropped their price even b atomic number 18ly to just 70 and brought it out in a new littler design. However things never picked up as the Playstation2 was released and so no mavin wanted the somewhat dated Plays tation1. Prices remain at 70 at once in all major shopping stores. P.e.d (Price elasticity of demand) is divined as the reactivity of the quantity demanded of a good to changes in its own price. It is calculated by the equation - P.e.d = % change in quantity demanded % change in price As I have found information figures when the Plastation1 went on sale and more recent figures, I have worked out the P.e.d for the Sony Plastation1. P.e.d = 0.91 ============ The result shows the Sony Playstation1 is inelastic. This inwardness the consumers are aware of changes in the price and reflect on them to whether or not they buy the product. Because of the quite neutral result of P.e.d it shows a agreement ... ...le, an change magnitude in the price of coffee will increase the demand for tea. This, I would not expect to be true for the consoles we are talk about. Goods in joint demand however will have ostracise cross elasticities. For instance, an i ncrease in the price of record players will deoxidize the demand for records. This I would expect to be true for the Playstation1 and Nintendo 64. The coefficient will be high for goods that are very close substitutes or backups and low when they are neither substitutes nor complements. Uses of cross elasticity of demand Firms can estimate the force out on their demand of a competitors price cut. Firms can estimate meeting on demand for their product if they cut the price of a complement e.g. if they cut the price of the computer, how much will demand for software increase?