Executive Summary :: Economics

Executive SummaryThis report pull up stakes regard for alternative ways in which the LondonUnderground can smorgasbord their prices in order to reduce their loss interms of heart and soul tax income. The report will both identify and analysethese alternative methods in an attempt to find the most suit able-bodied wayof increasing the revenue for the London Underground. The report willalso look at how snap plays a key role in determining anydecisions as well as the outcome of these decisions made.The London Underground is at this precise time running at a loss and isin imperative need of things being turned around. The London Undergroundmay at one point in the future be privatised. What we need to contain is how we can emergence revenue before it floats so thatpotential shareholders will be attracted. We must see how prices canbe adjusted in coincidence with the market segments so that revenuecan be increased. ginger snap is crucial in our thinking as it canhave a big impact .1.1 DEFINITION OF ELASTICITYElasticity is the concept in economics that measures theresponsiveness of one variable in response to a nonher variable. The vanquish measure of this responsiveness is the proportional or percent transplant in the variables. This gives the most usable results for anytype or range of data. so catch is the proportional (orpercent) change in one variable copulation to the proportional change inanother variable.The general formula for elasticity isE = percent change in x / percent change in y1.12 DIFFERENCE BETWEEN ELASTIC AND INELASTIC conveyElastic means something is highly responsive to changes in somethingelse. For example, elastic hold means that the quantity subscribeedchanges a lot when the price changes. Inelastic demand means that thequantity demanded does not change much when the price changes.2.0 slipway IN WHICH FARES CAN BE ADJUSTED2.01 picking 1 whiz way of adjusting prices can be to decrease the provenders for students.Students often use this wait on as a means of transport to get totheir respective universities. If fare prices are lower, even thoughthe income per ticket is less, it may overall increase sales revenue.Other discounts may also be offered if a quarterly or seasonally trainpass was purchased, which would attract student to this service.2.02 OPTION 2Fare prices can be increased because many citizenry see this service asinelastic as they do not have any other means of transport. A lot of trade people use this service and may well be able to afford to paythe extra cost. However this is a very violent method as it mayencourage people to use confidential transport which may take the business