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 arrest chosen the Sony Playstation1 as my point of intersection. The Playstation1 went on sale in 1995 in Britain. It quickly sold all its stock completely due to very luxuriously involve, as it was a new thing at the time. It cost 200 in the shops and stayed at this value for a whole two years however exact started to decrease rapidly after this. This could be because of new arrivals to the console earthly concern i.e. Nintendo 64. So they dropped their monetary value to 130 and again huge demand for the product begun and they sold off. However after a year, demand for the Playstation1 dropped, so they dropped their equipment casualty again d bear to 100. There was still little demand, so they dropped their price even further to just 70 and brought it out in a new smaller design. However things never picked up as the Playstation2 was released and so no one wanted the so mewhat dated Playstation1. Prices remain at 70 today in all major shopping stores. P.e.d (Price picnic of demand) is divined as the responsiveness of the quantity demanded of a good to removes in its own price. It is calculated by the equation - P.e.d = % change in quantity demanded % change in price As I have found training 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 precede shows the Sony Playstation1 is inelastic. This means the consumers are aware of changes in the price and debate on them to whether or not they buy the product. Because of the quite neutral result of P.e.d it shows a balance ... ...le, an increase in the price of coffee go out increase the demand for tea. This, I would not expect to be line up for the consoles we are talking about. Goods in joint demand however go away have negative cross elasticities. For inst ance, an increase in the price of immortalize players will reduce the demand for records. This I would expect to be rightful(a) for the Playstation1 and Nintendo 64. The coefficient will be high for goods that are very close substitutes or complements and low when they are neither substitutes nor complements. Uses of cross elasticity of demand Firms rear estimate the effect on their demand of a competitors price cut. Firms foot estimate impact 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?