Price Elasticity of Demand

Refers to the measure of how sensitive the quantity of a product demanded is to a change in its price. It is calculated as the percentage change in the quantity demanded divided by the percentage change in price. If the value of price elasticity of demand is greater than 1, the demand is considered elastic, meaning that a small change in price results in a large change in quantity demanded. If the value is less than 1, the demand is considered inelastic, meaning that a change in price has little effect on the quantity demanded. Understanding the price elasticity of demand is important for pricing strategies and revenue management.

Price elasticity of demand is a measure of how responsive consumer demand is to changes in the price of a product or service. In business coaching, coaches might advise their clients to conduct a price elasticity analysis to determine the optimal pricing strategy for their offerings. By understanding the price sensitivity of their target market, businesses can set prices that maximize revenue and profits. Coaches might recommend testing different price points and monitoring sales data to identify the most effective pricing strategy for a given product or service.

Price Elasticity of Demand DEFINITION:

1. A measure of the responsiveness of demand for a product to changes in its price. 2. A calculation used to determine how sensitive consumers are to changes in price for a specific product or service.

Price Elasticity of Demand QUOTE:

1."Price elasticity of demand in business is like Goldilocks - you have to find the price that's just right." 2."Price elasticity of demand in business is like a seesaw - finding the balance between price and demand can be a real balancing act.""