Selecting the Optimal Price with Price Demand Elasticity
Price elasticity of demand measures how much a product’s consumption changes in response to price changes. A good is elastic if a price adjustment results in a significant shift in either supply or demand. If a price adjustment for the goods does not significantly affect demand or supply, it is inelastic. The elasticity of a product is impacted by the accessibility of an alternative. Demand won’t change as the price increases if the product is necessary and there are no suitable alternatives, making it inelastic.
In this chapter, we will learn about the following:
- What is price elasticity and how it can be used to maximize revenue?
- Exploring the data to determine pricing patterns and consumer behavior around them
- Determining the demand curve for different products
- Optimizing the price to maximize revenue for all items
In this case, we will use food truck sales data to analyze the impact...
