Discuss the importance of considering elasticity in pricing decisions and the danger of relying solely on costs.

ECO 6301 Unit 1 and 2 Journal

Part 1

Instructions

There is growing concern about poverty and income inequality. These two concepts, however, are not the same. Income inequality deals with the percentage of income earned by the different income groups, while poverty is concerned with how difficult it is for the poor to meet basic needs.

In Section 1.4, you read about deontological and consequential approaches to ethics. Using those approaches, evaluate how well free market systems versus government intervention in markets address poverty and income inequality.

Include in your discussion an explanation of how people in a free market economy, acting in their own self-interest, can better those around them. Bring examples from your own experiences where your actions, though entirely self-motivated, resulted in a benefit to somebody else.Your journal entry must be at least 200 words in length.

Part 2

Instructions

The required unit resources included information on pricing. You are introduced to the shutdown price, using elasticity to determine the effects of price changes, and cost-based pricing. Discuss the importance of considering elasticity in pricing decisions and the danger of relying solely on costs.