Chapter 89

Estimating a demand curve

Questions answered in this chapter:

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

  • What is the meaning of elasticity of demand?

  • Is there an 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. Chapter 90, “Pricing products by using tie-ins,” and Chapter 91, “Pricing products by using subjectively determined demand,” describe some simple models that might aid you in pricing a product to maximize profitability. This chapter discusses the concept of the demand curve, which factors into pricing.

Simply put, a demand curve tells you the number ...

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