Price Elasticity Models

Price elasticity models are formulas brands use to determine how a change in a product's price impacts customer demand.

What Are Price Elasticity Models?

There are several factors that influence demand for a particular product or service, including market trends, seasonality, and — often above other factors — the product's price. Price elasticity models are equations that brands use to evaluate how product price influences product demand. Brands can use price elasticity models in several ways, including to measure the linear relationship between price and demand or to measure the complexities of other variables that might impact demand alongside price. These models enable brands to pinpoint the price at which a product generates the highest demand, allowing teams to strategically adjust prices according to their business needs.

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