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Describe what price elasticity of demand means to a manager facing a pricing decision

Describe what price elasticity of demand means to a manager facing a pricing decision

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The relationship between the prices of of products and the quantities demanded by consumers in a given period of time is known as price elasticity of demand. The demand of a product is elastic when the revenue goes down with the price rise. It is very important for managers to know the price elasticity of demand for a product in a firm in order to regulate the production process as the demand for a particular good changes with the change in price. Marketing managers always should know the price elasticity as total revenue and total products sold get impacted with the price rise of the product.

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