Price Elasticity Analysis

Price elasticity analysis measures how sensitive customers are to changes in price. In pricing market research, it helps businesses understand how a price increase or decrease might affect demand for a product or service. If demand drops significantly with a price increase, the product is considered elastic; if demand changes little, it’s inelastic. This insight allows companies to set optimal prices, maximize revenue, and better strategize marketing efforts by anticipating customer reactions to pricing adjustments. Overall, it plays a crucial role in making informed pricing decisions based on consumer behavior.