個案總覽

The owner of an accessory shop in China is unsure whether it was a wise choice to start his own business. The owner has identified that if the shop continues as is, he may face a loss. He must come up with a solution. Should he accept an employee’s suggestion to cut prices in order to compete with low-end street stalls? Should he shut down the shop in the short run or even exit the market? Whichever path he chooses, he can approach the decision using the concepts of elasticity and cost analysis popular in microeconomics.

The owner of an accessory shop in China is unsure whether it was a wise choice to start his own business. The owner has identified that if the shop continues as is, he may face a loss. He must come up with a solution. Should he accept an employee's suggestion to cut prices in order to compete with low-end street stalls? Should he shut down the shop in the short run or even exit the market? Whichever path he chooses, he can approach the decision using the concepts of elasticity and cost analysis popular in microeconomics.