A season-long price cut in two Australian states, measured against states that held price, yields an elasticity near minus 1.91 and a contribution loss in this GB540 Unit 2 elasticity analysis. Searches like "gb 540 unit 2 assignment example", "gb540 unit 2 sample" and "gb540 unit 2 example" land here.
What a finished GB540 Unit 2 elasticity analysis looks like
About four pages with two worked calculations and one decision table. The first calculation uses the Australian promotion: sales in the two cutting states went from 212 to 252 motors, but because the other states grew 4 percent, the analysis first builds a counterfactual of 220.5 and measures against that. The midpoint quantity change is 13.34 percent against a price change of minus 6.99, giving an elasticity of about minus 1.91; the uncorrected figure, minus 2.47, is shown and rejected. The second calculation, from Norway, finds a cross-price elasticity of about 1.44 with gasoline outboards after their price rose from NOK 42,000 to 45,800. The decision table sets revenue beside contribution: revenue up 6.6 percent and contribution, at a landed cost of AUD 4,885 per motor, down 8.4.
How a GB540 Unit 2 example is structured
Each calculation follows the same order, data, adjustment, formula, result and meaning, so a grader can locate any step. The control-group adjustment comes before the elasticity because it is the analytical move the rest depends on; without it, the promotion is credited with growth the whole country enjoyed. Every percentage change uses the midpoint method, and a line explains its symmetry whichever way price moves. Signs are kept where they carry meaning, negative for own price and positive for the substitute. The decision table is where the analysis becomes managerial: an elastic response raised revenue, yet contribution fell because each extra motor carried a thin margin at the lower price. The closing section draws the pricing meaning plainly, that the cut should not be extended, and notes the limits of one season in two states.
The promotion as an experiment
Two states cut to AUD 6,900 for one season while the rest held at 7,400. The analysis treats the holding states as a control and explains why their 4 percent growth belongs in the calculation.
A counterfactual of 220.5 motors
Growth of 4 percent on 212 motors gives the sales the cutting states would likely have made anyway. Measured against that baseline, the cut added about 31.5 motors, not the 40 a raw comparison suggests.
Minus 1.91, and why not minus 2.47
Midpoint changes of 13.34 and minus 6.99 percent give an elasticity near minus 1.91. Ignoring the control inflates it to minus 2.47, and the analysis shows both so the correction is visible.
Gasoline prices and electric sales in Norway
With the firm's own price unchanged, a rise in gasoline outboard prices from NOK 42,000 to 45,800 accompanied a climb from 540 to 612 electric motors. A cross-price elasticity of about 1.44 marks them as substitutes.
Revenue up, contribution down
Revenue rose from about AUD 1.63 million to 1.74 million, but contribution fell from about 554,000 to 508,000 after the AUD 4,885 landed cost per motor. The recommendation is to end the cut.
Where marks go in GB540 Unit 2
Elasticity analyses in GB540 are routinely correct on the arithmetic and short on the meaning, stopping at elastic or inelastic when the prompt asked what the firm should charge. Graders commonly reward the sentence after the number more than the number. Revenue treated as the goal is a frequent deduction, because an elastic response can raise revenue and still lower contribution, as it does here. Crediting a price change with growth that happened everywhere inflates the estimate; the missing control is a quieter error that stronger papers catch. Percentage changes computed from inconsistent bases, sometimes the old value and sometimes the new, produce elasticities that disagree with themselves. A cross-price elasticity reported without its sign loses the substitute-or-complement finding. Recommendations that ignore how narrow one season's evidence is tend to draw a margin comment.
Get a GB540 Unit 2 example written to your instructions
Hand over the Unit 2 problems or scenario, whatever prices and volumes it supplies, and the grading rubric. Every elasticity in the returned sample is worked by the midpoint method, signs kept where they matter, and the pricing call rests on contribution rather than revenue. Delivery is 24-48h, and there is no fee for a first sample.
GB540 Unit 2 questions, answered
Should the recommendation follow revenue or profit?
Profit, or contribution after variable costs when fixed costs do not change. Revenue ignores what each extra unit costs to produce and deliver. Elastic demand means a price cut raises revenue, but if margins are thin the extra units can cost more than they bring in. Where the data permit, report both and base the recommendation on contribution.
What if my data have no control group?
Then say so and treat the estimate with caution. Look for anything that could have moved sales at the same time, such as season, a competitor's move or a change in income. If your prompt supplies only two price-quantity pairs, compute the elasticity as asked and add a sentence noting what else might explain the change.
Why keep the sign on a cross-price elasticity?
Because the sign is the finding. A positive cross-price elasticity means the goods are substitutes, so a rival's price rise helps you; a negative one means complements, so it hurts you. Many texts drop the sign on own-price elasticity by convention, but dropping it on cross-price erases the answer the problem was asking for.