{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Demand - Demand Demand Estimatingdemand Estimatingdemand...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Demand Demand A key determinant of price.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Estimating demand Estimating demand The operating assumption is that if  you lower the price you will sell more. The question is: How much more? The answer is: The demand curve.
Background image of page 2
Demand curves: Demand curves: Elastic Inelastic Unitary Fixed Moving along a demand curve vs.  shifting the curve. Most demand curves aren’t straight  lines
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Elastic demand curve Elastic demand curve $3 $6.75
Background image of page 4
Inelastic demand curve Inelastic demand curve $4.50 $2.50
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Unitary demand Unitary demand D D Price .50 1.00 1.50 2.00 2.50 0 20 40 60 80 100 120 Quantity demanded $120 $120
Background image of page 6
Fixed demand curve Fixed demand curve
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Price elasticity – the shape of the  Price elasticity – the shape of the  demand curve. What determines  demand curve. What determines  elasticity? elasticity? Urgency Substitutability Size of price relative to income Demand curves become more elastic over  time Other uses Time frame Product durability
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}