100 75 50 25 10 30 Quantity
B 0 25 50 75 100 0 10 20 30 40 Quantity Price
Estimating Demand Consider Demographic Factors How many potential buyers are in the market? Consider Psychological Factors Price indicator of quality?
Estimating Demand • Consider Demographic Factors – How many potential buyers are in the market? • Consider Psychological Factors – Price indicator of quality?
Luxury Priced Product Demand Curve s190 180 170 160 150 140 130 120 110 100 123456789 Quantity Demanded thousands of units
Luxury Priced Product Demand Curve $190 180 170 160 150 140 130 120 110 100 1 2 3 4 5 6 7 8 9 Price Quantity Demanded thousands of units
Elasticity of Demand Price Elasticity %o Change in Quantity Demanded of demand %o Change in Price Price elasticity--a measure of the sensitivity of demand to changes in price
Price Elasticity of Demand % Change in Quantity Demanded % Change in Price = Elasticity of Demand Price elasticity-- a measure of the sensitivity of demand to changes in price