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

Economic analysis to your company - Essay Example Due to the uniqueness in the nature of services offered to the people, medical services provided by Cleveland Clinic in Abu Dhabi will have a negative price elasticity of demand. Price elasticity of demand measures the responsiveness of demand to changes in the price of a particular good. An elastic demand occurs if a small change in the price of a service or good leads to a large change in the quantity 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 increase in the prices of goods and services leads to a corresponding decrease in the quantity of goods and services demanded by the market.