Answer to Question #250534 in Microeconomics for Jack

Question

If you were going to market a product how Would you use the analysis of price elasticity of demand to help determine the product you would market

Answer 1

In order to calculate the ideal price for a product, I will use price elasticity of demand. According to this theory, things should not be priced too low because the manufacturer will not be able to cover his or her own costs, nor should they be priced too high since the buyer would be scared away. In order to calculate the ideal selling pricing for their products, I will use price elasticity of demand. If a product has an excessively expensive price, I may go to a different firm for a similar product, purchase a substitute, or forego the purchase altogether.