Inelasticity of Demand and Your Pricing Strategy

Last week, Marka and the tribe discussed how understanding price elasticity can help businesses like FEI arrive at an intelligent pricing strategy. This week, they discuss inelasticity of demand and its applications to pricing. Remember, fire = print.

Marka stood in front of the FEI tribe holding a Slinky. “As we discussed last week, elasticity is how responsive demand is to a change in price. This Slinky will help us understand the concept of inelastic demand. Say its length represents a product’s price and its width represents a product’s demand. Now let’s raise the price of our product that’s experiencing inelastic demand,” she said, extending the Slinky as far as it would go.