I'm confused, Can a product be price elastic even if it is a new product in a market and the only such product in its category, such that consumers do not want to purchase it at it's initial high price skimming price? If so, could you please give an example?
IMO, price elasticity is subjective to the purchasing customers and thus, the situation you mentioned is still possible even if it's a monopoly. A product can appeal to different customer segments, and depending on their economic backgrounds, one can be relatively more price sensitive than the other. Price sensitivity (and hence, price elasticity) is also affected by other factors such as the product being a consumer staple vs. discretionary, price level (imagine the percentage of your income spent on the product), or economic utility of the product and how the pricing is being justified by that.
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I'm confused, Can a product be price elastic even if it is a new product in a market and the only such product in its category, such that consumers do not want to purchase it at it's initial high price skimming price? If so, could you please give an example?
IMO, price elasticity is subjective to the purchasing customers and thus, the situation you mentioned is still possible even if it's a monopoly. A product can appeal to different customer segments, and depending on their economic backgrounds, one can be relatively more price sensitive than the other.
Price sensitivity (and hence, price elasticity) is also affected by other factors such as the product being a consumer staple vs. discretionary, price level (imagine the percentage of your income spent on the product), or economic utility of the product and how the pricing is being justified by that.
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Merci !
De rien!