Discussion about changing supply factor for the good

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You and your boss are having a discussion about a changing supply factor for the good you bring to market. You manufacture widgets, specifically left-handed widgets for sale in the Maryland marketplace. Your boss has won awards celebrating her entrepreneurial spirit and her obvious mastery of business as your firm, under her leadership, has had tremendous success over the past 15 years. Your boss is looking to you for new ideas given that you are an MBA student. Basically you and your boss agree that due to higher input prices, where the inputs are used to make widgets, your supply curve will decrease. Your boss believes that the demand for your widgets is inelastic with respect to price; you believe that the demand for your widgets is elastic with respect to price. While you are not required to debate the actual price elasticity of demand for your product, you are required to explain to your boss why it makes a difference as to what the elasticity is for the product in terms of impact on total firm revenues. Please be sure to use graph(s) in answering.

Reference no: EM131005912

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