Recession Guru Assignment (Gurjeitpahl -5Z)

One too many times have we heard that the current recession is the worst one mankind has ever faced. Millions have been left in poverty, huge companies such as Lehman Brothers has collapsed, firms have run into debt and businesses have badly suffered. How then can both consumers and producers reduce costs to stretch their dollar?

Recession or no recession, to many women, the latest bags, shoes, and wallets are a must-have. It is possible buy these items and yet, not spend too much on them. At http://www.handbagdrop.com/ , replica bags, such as those of Louis Vuitton, Fendi, Chanel, and Prada, are made and sold at a much lower price (between $30 and $150) while an original bag from these boutiques would cost one no less than anything between $1000 and $1600. At this website, customers are spoilt for choice. Thus, the demand for bags, shoes, and wallets becomes elastic. This is because, when the demand for one brand of bags decreases due to some reason, people can choose from many other brands. If a consumer purchases more than 3 pieces, the wholesale price is offered, making the bags even more affordable. There is also no shipping costs- thus, not imposing on the consumer.

How then can a business owner reduce costs? UE Trust and Finance, a firm based in Luxembourg, is one such company that has taken steps to cut costs in tumultious times like this. Instead of retrenching workers, the company's directors' salaries and perks have been reduced since the directors' tend to absorb a significant proportion of the company's revenue for themselves and their children's schooling feels for example. When they need to travel for business, they can fly on economy class or take a budget airline. They can also put up at 'budget' hotels instead of upmarket hotels. This gives rise to less oppurntunity costs as the 'saved' money can be put to other use.