2009-07-15, 11:15 PM
Focus groups and Market Research projects help the producer to see what the consumer demand is for a product. It can be as simple as asking someone on the street "how much would you pay for this" to having a complex scientific poll showing how well the product sells at different prices. If the product is being sold in different markets, they can play around with different prices to see which one maximizes profits.
In terms of an individual seller, they need to figure out whether their product is inelastic (able to have a price raise and still raise revenue) or elastic (loses revenue with price raise). All elastic and inelastic products share the same characteristics, so it should be easy to tell if a product is inelastic or elastic.
In terms of an individual seller, they need to figure out whether their product is inelastic (able to have a price raise and still raise revenue) or elastic (loses revenue with price raise). All elastic and inelastic products share the same characteristics, so it should be easy to tell if a product is inelastic or elastic.