Using price elasticity of demand to help determining a pricing policy?by math8 Tags: demand, determining, economics, elasticity, historic data, price, price elasticity, pricing 

#1
Feb214, 01:01 AM

P: 161

How can price elasticity of demand for some data help in determining a decision making process in a future pricing policy?
I have some data that I want to analyze. I am given prices and demand for different products over a period of time. And I would like to use the price elasticity data to get some answers (or maybe other methods?). I would appreciate any ideas on how to go about approaching this problem. I was thinking about performing a regression analysis, but, according to the data that I have, I don't think demand only depends on the price, given the fact that the prices given are mostly stable, and the demand fluctuates a lot. 



#2
Feb414, 09:18 AM

Mentor
P: 10,840





#3
Feb414, 05:32 PM

HW Helper
Thanks
P: 5,581

A regression analysis can help you analyze the factors going into the pricedemand relationship.
Have you done the first step, which is plot your data? This can tell if you have a relatively linear relationship between price and demand or if the relationship is somewhat nonlinear. That helps to determine the type of regression analysis to perform. 


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