Read the following article regarding commodities. What are commodities? Why are manufacturers and retailers contemplating raising their prices? How might they convince customers to pay more? Which customers are most suceptable? What is the danger to the overall economy? Is there are a way to make it work out?
8 Comments
daisy lopez
3/2/2011 05:10:42 am
commodities is like a quantity of goods. manufactures and rettailers are contemplating on raising their prices because the materials such as steel has risen up to 20% the past year. a way to get customers to pay more is going to be pretty hard because other companies such as LG and Samsung are a big rival to Whirlpool.the danger to the overall economy is that people are probably not going to be buying many things because gas prices also keep going up and thats were most of the money is going to to gas prices and that affects everyones bussiness.
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Jose Hernandez
3/2/2011 11:36:13 am
Commodities are economic goods that are demanded by consumers such as being agricultural for example. Manufacturers and retailers are contemplating on raising prices because the prices of products such as steel have become more expensive in the last year. The washing machine companies are doing so because they have no promised price for the customers. They raise the price because the companies have the choice, but also the washing machine is an inelastic product so consumers are forced to purchase it. They have that option or the alternate of air drying their clothes on hangers. This is a technique to convince the consumer to buy the product. It becomes inelastic and no matter the price, they are willing to pay for it. The soaring price of cotton is key for retailers because for customers they will keep buying the clothes with prices being raised. This will keep the economy stable because although people are paying more, the price is being raised from the result of inflation in a country's economy. The only way to work it out is for the retailers to put a fair price for consumers but that is likely to occur and as prices become more expensive, consumers will become more used to the new prices.
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Ihtisham Khan
3/2/2011 12:10:08 pm
Commodities are different types of good that the consumers want like vegitables and fruits are types of commodities. Manufacturers and retailers are planning on raising prices because, the materials they use such as steel are becoming more expensive. They get the consumers to pay more because some items are inelastic, like the washing machine, and the consumers have to buy it. So the retailers raise the price a little and the customers to seem to care. Also they can tell the customers if they buy two of the samethings then they could get one free, or get half price one the item, so customers are intriguied by this and are likely to buy that item. The danger to the overall economy is, if the prices for other things start to go up, people will stop buying that item, if it is elastic, and will wait for alternatives. Therefore no money will be spent and the economy wont grow. The only way to work this out is if the retailers start to set reasonable prices, if could damage their buisness, but if they way over in their price, then that will also hurt them, so they must keep a steady price, even if they go up it should be very little.
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Mayra Hernandez
3/2/2011 12:10:10 pm
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Chelsea Hoff
3/2/2011 03:56:30 pm
A Commodity is an economic good that has demand. Due to the economy, "American manufacturers have had to suck up most of the increase in the prices of their raw materials". Due to this, manufacturers and retailers are contemplating raising their prices on their products because the materials they use to build their products "such as steel" are at higher price points. In order for the companies to make a fair profit for their business, they are forced to raise their market prices. Although a washing machine, for example, is an inelastic good, therefore when someones washer breaks they can't just live without a washer and drier, they have to buy a new one. The catch is, that if, take the washing machines in the article for example, Whirlpool and Electrolux raise their prices 10% higher than Samsung and LG's prices. There will be no demand for the Whirlpool and Electrolux washers over the Samsung and LG washers. The risk in raising the prices of the Whirlpool and Electrolux washers is that, in the minimal chance that people still have demand for their washers, the business could make a fair profit on their washers, as apposed to before, where they weren't making as much money because some of their profit was going away to the steel manufactures. Although, what is more likely to happen if Whirlpool and Elctrolux raise their prices, is that all of a sudden, instead of just floating and doing alright with minimal profit due to the price of steel from the steel manufacturers, there will be no demand at all for their washers over Samsung and LG's, and they will have no profit, so their stock will be in the tank. They could try and trick the costumers to pay more for their washers by saying that they use less water, or that they are made of high quality material, or by saying that they are the new and improved version and have touch screen or something. They could also make smaller washers and sell them for the original price. Therefore they cost less to make, although families might still choose LG and Samsung due to their family style size regular washers that they supply at the same price point as the mini washers. The costumers who can afford a washer and have a want for it, basically have demand for a washer, are more susceptible to buy one of Whirlpool's washers. The people who are trying to save money up for a washer, will be susceptible to the deals because they will be waiting and searching for them. The people who can't afford a washer at all will have to go to a laundry mat. The danger to the economy, is that when items are made elastic people will wait until a deal comes to buy an item. If things that are inelastic go up in price, consumers have no choice but to buy those things. Although, in that route they are spending more money on the things they absolutely need, than on the things that are a luxury to them. There really isn't a way for the economy to work out, manufacturers need to be very fair with their prices at this time, and consumers need to realize that everything is going to cost a little more than usual. The economy is at a low right now and as consumers and retailers, we all need to be mindful of that and think about what we really need and not get too greedy with money that we want.
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Kyle Jimenez
3/3/2011 01:06:59 pm
Commodities are goods that are in demand. Manufacturers are thinking about raising the prices of their items because the prices of what they have in the market is raising in price. It's simple, prices go up for companies to buy the products for their shelves so when they put it out for re-sale they have to raise the prices in order to make a reasonable profit. Companies have the option of raising prices on certain items depending on whether they are considered elastic or inelastic in the consumer's eye's. I say, "in the consumer's eye's" because if the company believes their products value could increase, but not the consumer then they won't have anyone buying the products. Also, the damand for the product is a key assential to the increase in capital. I really have no clue as to which age group or region of people would be most suceptable to purchasing items if the prices were to increase. My best guess would be younger adults in their early 20's simply because they are more relaxed with their spending and don't really have their eyes on their saving account at that age. I'm guessing that the danger to the overall community is that in time to come eventually many manufacturers are going to have to close up shop and call it quits. I couldn't guess as to how to help out the economy. We are pretty much F$$$ED!!!!!
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Emily Lider
3/3/2011 11:13:32 pm
A commodities are products which are considered basic necessities for one country. For example some are grain, milk, beans, etc. Commodities change from country to country. What this article is stating is that the price of materials which are used to make products are going up which is putting the retailer in a hard situation on whether they should raise the prices or not. The result is the retailer and the manufacture has to raise the prices because if they don't there will not a big enough profit for the company to last. The way in which the customers can raise the prices depends on the value of the object and its importance. This is called the elastic and in elasticity of a consumer good. The example which is given is the whirlpool washer against the LG and Samsung. The argument is related to the in elasticity of the product.Since everyone needs a washer, Whirlpool thinks if they raise the prices, but promote to washer as "more efficient" then LG people will buy it and the profit will be higher because the other brands are not making a great profit either. This is where the danger towards the economy comes in. Many people now a days are waiting to buy things, because something else that is cheaper may show up and they might miss out on it. Therefore people are waiting to buy things until the best deals, which is causing the consumers to loose profits because there is no revenue between the time the sale is made and the before or after. In my opinion, I do not think the economy is going to get any better unless the people decide to work together to fix the problem. The consumers, retailers and even manufactures need to compromise on the goods in order to keep the economy from falling too far. People will still need to buy commodities, but that will not just keep the economy up because we are a diverse country!
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Alberti godinez
3/4/2011 03:48:59 pm
Comodities r products that are in demand. Prices of materials are going up brcause of the shortage. When material cost goes up retail price goes up so that companies get close to there profit. Material prices such as fuel and cotton are going up because of the shortage And high demand. Shirts are expected to go up by 10 percent because of the. Cotton shortage. As for fuel it is expected to go up to around 6 dollars by this summer that raises the cost of everything. The reason for that is because the product needs to be ahipped and the cost of shipping is going to spike. I think that we need to have more alternatives for the main commodities such as fuel. If there was a alternative option for Fossil fuels the balance between fossil fuels and alternative fuels would balance out in price and demand.
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