Air Conditioner-Price Elasticity in Egypt
Price Elasticity of Demand of Air-conditioners in Egypt between 1980 and 2013
Name: Amira Nabil
MBA – Managerial Economics 527
1. Introduction
A wide range of factors, notably globalization and economic growth, have changed the lifestyle of developing countries in general, and Egypt in particular, in the direction of western or developed countries’ lifestyles and diets. Such factors have not only increased meat consumption but also changed meat consumption patterns.
The way consumers allocate consumption expenditure among goods and services is of particular interest to economists. The purpose of this paper is to study the price elasticity of demand for air-conditioners in Egypt, starting from the 1980s till 2012, and how it is expected to be in summer 2013.
The paper will summarize few basic concepts in economy and how this is applied on the price and demand of air-conditioners in Egypt.
2. Scarcity and Choice
The purpose of economic activity
It is often said that the central purpose of economic activity is the production of goods and services to satisfy our changing needs and wants.
The basic economic problem is about scarcity and choice.
All societies have to decide:
(i) What goods and services to produce:
Does the economy uses its resources to operate more air-conditions or hospitals? (ii) How best to produce goods and services:
What is the best use of our scarce resources?
Should air-conditioners be imported from other countries or manufactured in Egypt with less quality however inducing more labor opportunities in the market? (iii) Who is to receive goods and services:
Who will get expensive central unit air-conditioners and who not?
Should there be a minimum price for air-conditioners? If so, at what level should it be set?
Scarcity
It is the development of virtually every type of society can be described as the uncovering of new wants and needs - which producers attempt to supply by using the
Name: Amira Nabil
MBA – Managerial Economics 527
1. Introduction
A wide range of factors, notably globalization and economic growth, have changed the lifestyle of developing countries in general, and Egypt in particular, in the direction of western or developed countries’ lifestyles and diets. Such factors have not only increased meat consumption but also changed meat consumption patterns.
The way consumers allocate consumption expenditure among goods and services is of particular interest to economists. The purpose of this paper is to study the price elasticity of demand for air-conditioners in Egypt, starting from the 1980s till 2012, and how it is expected to be in summer 2013.
The paper will summarize few basic concepts in economy and how this is applied on the price and demand of air-conditioners in Egypt.
2. Scarcity and Choice
The purpose of economic activity
It is often said that the central purpose of economic activity is the production of goods and services to satisfy our changing needs and wants.
The basic economic problem is about scarcity and choice.
All societies have to decide:
(i) What goods and services to produce:
Does the economy uses its resources to operate more air-conditions or hospitals? (ii) How best to produce goods and services:
What is the best use of our scarce resources?
Should air-conditioners be imported from other countries or manufactured in Egypt with less quality however inducing more labor opportunities in the market? (iii) Who is to receive goods and services:
Who will get expensive central unit air-conditioners and who not?
Should there be a minimum price for air-conditioners? If so, at what level should it be set?
Scarcity
It is the development of virtually every type of society can be described as the uncovering of new wants and needs - which producers attempt to supply by using the