Season 2, Episode 2: Do you increase revenue by lowering or raising prices? It all depends on the price elasticity of demand for your product or service. Brian Spencer is looking for an investment from the sharks so he can mass market his amazingly cool, extreme-sport pogo stick. However, their advice is to increase his price (by 100-400%!). Though he’ll sell fewer units with a higher price, his total revenue will increase if demand for his product is inelastic. What causes demand to be inelastic? Ask your students this question and then see if they think the demand for Vurtego pogo sticks will be inelastic.
Trackback from your site.