2. Graphically
Q Q1
Relatively Elastic Demand (EP>1):
If percentage change in quantity demanded is greater than the percentage change in
price of a good, then the demand is known as relatively elastic demand.
Mathematically, relatively elastic demand is known as more than unit elastic demand
(Ep>1).
For example, if the price of a product decreases by 5% and the demand of the product
increases by 8%, then the demand would be relatively elastic
DD represents relatively elastic demand curve
which is flatter
This type of demand is found in case of
luxurious goods such as automobiles, gold and
diamond etc..
The percentage decrease in quantity demanded
is greater than the percentage increased in
price.
i.e. (Q1-Q)/Q>(P1-P)/P.
Ep=-
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑑𝑒𝑚𝑎𝑛𝑑
𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
Where percentage change in demand is greater
than the percentage change in price
If demand for goods is elastic the reduction in
price leads to an increase in quantity demanded
and profit.
+8%
-5%
3. graphically
Q Q1
+8%
-5%
Relatively Inelastic Demand(EP<1):
If percentage change in quantity demanded is less than the percentage change in price
of a good, then the demand is known as relatively inelastic demand.
Mathematically, relatively elastic demand is known as less than unit elastic demand (Ep<1).
For example, if the price of a product increases by 8% and the demand of the product
decreases by 5%, then the demand would be relatively inelastic.
DD represents relatively inelastic demand curve
which is steeper.
This type of demand is found in case of daily
consumption goods such as food, cloth and
shelter..
The percentage decrease in quantity demanded is
less than the percentage increased in price
i.e. ∆Q/Q<∆P/P.
Q1-Q/Q <P1-P/P
Percentage change in demand< percentage
change in price.
If demand is inelastic, then reduction in price
cannot increase quantity demanded and profit.
Thus the price elasticity of demand helps to
determine appropriate price of goods and
services.
4. Time rigidities in consumption of
forest products
Consumption of forest products refers to the
expenditure on consumption of forest goods and
services at a given level of income (a portion of
income that is used to purchase goods and
services. income=consumption + saving
There is longer rotation times in case of timber
related trees.
Non-timber forest products may not be collected
on time.
5. Changing Economic Environment
and Farming
The economy is divided into three sectors which are:
Primary Sector (Agriculture, Forestry, Fishery, and
Mining and Quarrying), Secondary Sector
(Manufacturing, Construction, Electricity, Gas and
Water) and Tertiary Sector (Service Sector)
The contribution of primary, secondary and tertiary
sectors to GDP in 2019/20 was 26.8, 12.8 and 60.4
percent whereas such contribution is estimated to be
26.4 percent, 12.5 percent and 61.1 percent,
respectively in fiscal year 2020/21.
Farming practice is shifted from food crops to cash
crops
6. Importance of Knowledge in
Business
Business knowledge is a business owner’s
extensive reservoir of understanding on
customers’ needs and preferences,
business environments and their dynamics,
staff skills, experiences and potentials, and
the business’ overall foreseeable direction.
7. Sources of Business Knowledge
1. Market and needs analyses: They are used to expand
the knowledge pool of business owners, increase
general operations, and clarifies business’ long-term
objectives and plans.
2. Employee and supplier networks
The opinions of employees and suppliers are important.
Opinions can include impressions on the performance
of business owners and how the business responds to
relevant concerns.
Business owners can conduct online surveys through
mobile applications or meet them personally and have
an informal chat with them to get this information
directly.
8. Cont..
3. Business environment and dynamics
Outside factors and stimuli including developments in
local and international politics and economy,
technology, and the society can affect business goals
and the business’ development.
4. Product and service research and development
Business owners must continually utilize scientific and
technical research and developments on products and
services to pave innovation in the line(s) of production
or service offering(s).
9. Benefits of Business Knowledge
1. Business efficiency: Business owners will be
able to intensify and strengthen their business
efficiency using their expertise as reflected in
better business standards, processes, products,
and services.
2. Improved products and services: Business
owners should utilize their business knowledge
to efficiently bring products and services closer
to their customers and target market.
10. Cont..
3. Customer satisfaction
When business owners deliver quality products and services that
respond to the needs and wants of customers, it is important to
maintain and grow a satisfied market base.
4. Staff productivity
With knowledge sharing, employees can mutually benefit from
each other’s knowledge and expertise in daily business operations.
This continual enrichment of employees’ best practices through
knowledge sharing results in better operations, better products and
services, and the speedy realization of all business objectives.
5. Knowledge licensing and sales
Look into ways to share expertise and go into knowledge licensing.
14. Importance of Management
Management meet the challenges of change
Accomplishment of group goals
Effective utilization of business
Effective functioning of business
Resource development
Sound organization structure
Management directs the organization
Integrates the various interests
Stability
Innovation
Co-ordination and team- spirit
Tackling problems
A tool for personality development
16. Cont..
the learning and adjustment of management and
leadership is the ability to organize organizations,
the facilitation and evaluation of this, and the
assistance of managers and leaders to progress
through being effective (able to do without
knowing how they do it) to being reflective
(knowing how they do it) to being critically
reflective (thinking about the strength and
weaknesses of, and alternatives to, their existing
knowledge that underpins their actions).
