In the study of microeconomics, the understanding of Price Elasticity of Demand is paramount to the strategy: Economic Principles and Issues Assignment, UiTM, Malaysia

University Universiti Teknologi MARA (UiTM)
Subject Economic Principles and Issues

In the study of microeconomics, the understanding of Price Elasticity of Demand is paramount to the strategy of pricing by companies; i.e. when a product has an inelastic demand, companies would usually raise prices in order to maximize their revenue potential.

This has then led to companies engaging in a multi-billion dollars advertising campaign in order to raise their brands’ awareness amongst consumers of today. In your opinion, should companies engage in brand advertising or brand activism in order to maximize their revenue potential today? Discuss the issue above using relevant data and real-life cases.

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