Have you ever noticed that prices changes from time to time for seemingly no reason? Well, believe it or not, there is most definitely a reason. Businesses try to extract as much money as possible from consumers for their products. However, the firm owner/manager needs to know whether the firm can safely and effectively raise/lower its price and what the impact of doing so will be. The price elasticity of demand helps the owner/manager make that determination.
When you pick your product, think about the following questions: What are some of the dynamics of this market? How are prices determined? What might cause prices to change in the marketplace?