Economic analysis to your company Essay Example | Topics and Well Written Essays - 1000 words

Economic abbreviation to your company - Essay ExampleDue to the uniqueness in the nature of function offered to the people, aesculapian service provided by Cleveland Clinic in Abu Dhabi will have a negative price snatch of demand. Price elasticity of demand measures the responsiveness of demand to trades in the price of a biticular good. An elastic demand occurs if a small change in the price of a service or good leads to a biggish change in the bar demanded. On the other hand, inelastic demand occurs if a small change in the quantity demanded accompanies a large change in the price of a commodity. In a free market economy, prices set the quantity of goods and services demanded. As such, if there is a decrease in the price of goods or services offered by a particular company, the market responds by increasing the quantity of goods and services, while an make up in the prices of goods and services leads to a corresponding decrease in the quantity of goods and services demande d by the market. As economists measure the elasticity of demand, they consider the level of change between price and quantity. However, not all goods and services obey the law of demand, as Veblen argued. Special commodities such as Veblen and Geffen goods, as easily as aesculapian care services do not obey this law. Subsequently, in case Cleveland Clinic increases the prices of their medical services, there is likely to be no or insignificant changes in the number of people see the clinic for medical attention. Additionally, even if the clinic were to lower the price of their medical services, there would be no significant increase in the number of people visiting the clinic for medical services. Only the sick require medical attention, a reason for this reality. Despite operating in an splay market structure, Cleveland Clinic, Abu Dhabi does not have to con mannikin to the rules of an disseminate market structure. Competition least affects the number of people visiting the cl inic. It operates as a special form of monopoly, due to the uniqueness of its services. Thus, its cost structure does not conform to the open market rules. 2. How global contention impacts Cleveland Clinic, Abu Dhabi Global competition would negatively affect the profitability of Cleveland Clinic, Abu Dhabi. Medical services are an essential part of peoples lives. Globally, people spend large parts of their budgets seeking medical attention. Cleveland Clinic, Abu Dhabi operates under global expertise such as physicians and medical experts from North America (Modern Healthcare 25). In open market economies, it is not just the price of commodities, which determine the level of competition between firms. Quality to a fault serves a big role in determining the number of people vising a medical clinic. If Cleveland Clinic were to spate exorbitant prices against a poor service delivery system, people would opt for damp hospitals charging reasonable fees for their services. Since medica l attention is a special kind of service offered to the people, its market demand does not change with informant to the prices rather, shade of service delivery is the biggest determinant. If Cleveland clinic, Abu Dhabi, due to the special services it provides to the people were to offer low quality services to the customers, nothing would stop people from seeking medical attention from other international clinics providing better medical attention. In this scenario therefore, prices are likely to play no particular