>We can say that when the elasticity is larger than 1, the demand responds "super-linearly" to changes in price. Empirical evidence suggests this is what happens in most scenarios.
Hint: don't act boldly on that evidence unless you can supply commodity quantities to the masses.
Once you accept that though, all the equations that follow add up.
Nothing wrong with making the equations easy by working within a narrow enough pricing range where elasticity can be accepted as constant, but then your exposure to inflation dwarfs the narrow range you have for expected performance of your pricing strategy to compensate for it.
If you can't price your product better without any of this, you've got bigger problems than equations will help you with :\
Heck, if you can't rake in the bucks without having to struggle making every last bit of profit to begin with, it's probably worse than you think.
>We can say that when the elasticity is larger than 1, the demand responds "super-linearly" to changes in price. Empirical evidence suggests this is what happens in most scenarios.
Hint: don't act boldly on that evidence unless you can supply commodity quantities to the masses.
Once you accept that though, all the equations that follow add up.
Nothing wrong with making the equations easy by working within a narrow enough pricing range where elasticity can be accepted as constant, but then your exposure to inflation dwarfs the narrow range you have for expected performance of your pricing strategy to compensate for it.
If you can't price your product better without any of this, you've got bigger problems than equations will help you with :\
Heck, if you can't rake in the bucks without having to struggle making every last bit of profit to begin with, it's probably worse than you think.