Understanding elasticity can really help businesses set better prices for their products. Here’s how it works:
Price Sensitivity: If demand is elastic, it means that a small change in price can cause big changes in how much people buy.
Maximize Revenue: Businesses can adjust prices up or down based on how customers respond. The goal is to get the most total money from sales.
Stock Management: Knowing how supply elasticity works helps businesses manage their stock well. This means they can prevent having too much or too little inventory.
In short, smart pricing strategies lead to better sales and more profits!
Understanding elasticity can really help businesses set better prices for their products. Here’s how it works:
Price Sensitivity: If demand is elastic, it means that a small change in price can cause big changes in how much people buy.
Maximize Revenue: Businesses can adjust prices up or down based on how customers respond. The goal is to get the most total money from sales.
Stock Management: Knowing how supply elasticity works helps businesses manage their stock well. This means they can prevent having too much or too little inventory.
In short, smart pricing strategies lead to better sales and more profits!