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Microsoft® Excel Data Analysis and Business Modeling by Wayne L. Winston

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Chapter 68. Estimating a Demand Curve

  • What do I need to know to price a product?

  • What is the meaning of elasticity of demand?

  • Is there any easy way to estimate a demand curve?

  • What does a demand curve tell us about a customer’s willingness to pay for our product?

Every business must determine a price for each of its products. Pricing a product properly is difficult. In Chapter 68-Chapter 71, I’ll describe some simple models that might aid you in pricing a product to maximize profitability. For further insights into pricing, refer to the excellent book Power Pricing, by Robert J. Dolan and Hermann Simon (Free Press, 1996).

What do I need to know to price a product?

Let’s consider a product such as a candy bar. In order to determine a profit-maximizing ...

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