Your Bid to Set Up the Computer System at Evergreen

question 55

Essay

Your bid to set up the computer system at Evergreen, a small local business, was accepted. Today you found out that the software that Evergreen's system requires just had a price increase, so your bid will need to increase to reflect this change. As you plan your message to notify Evergreen of the increase, you consider not telling them the reason for it, as you don't think they need to be bothered with the technical details. Why might this backfire on you? What might you do in your message to soften the bad news?

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Definitions:

Available Substitutes

Alternative products or services that consumers can use in place of another product or service.

Inelastic Portion

The segment of a demand curve where the quantity demanded changes very little with a change in price.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating greater sensitivity.