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2.11 Demand-Price-Revenue with the Chain Rule - Group

2.11 Demand-Price-Revenue with the Chain Rule - Group -...

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First Thoughts about a business idea” - PRICE-DEMAND-REVENUE 1. Choose a single product (no services!) 2. Choose a time period for the “accounting” (days, weeks, months, years) 3. Choose a market (local, state, national, global) (how many total people) 4. Think about what % of that market might actually be interested in your product. 5. Think about what % of those who might buy your product at some reasonable price (specify the price). That that number and divide by the product life (how often would they repeat a purchase) use the time based on your choice in #2. 6. Now think about what percentage of those you might lose as customers if you raise your price by say 10%. 7. With 5 and 6 you now have two ordered pairs for (price, quantity) so find an exponential demand model with them. (suggestion: exponential regression) 8. Within what domain should you use your model? Should you use prices near zero? Should you allow prices twice your reasonable price? Specify a domain. 9.
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