Top Highlights

• price elasticity shows exactly how responsive customer demand is for a product based on its price.
• “Marketers need to understand how elastic, sensitive to fluctuations in price, or inelastic, largely ambivalent about price changes, their products are when contemplating how to set or change a price,”
• Note that the negative is traditionally ignored and the absolute value of the number is used to interpret the price elasticity metric, as it’s the magnitude of distance from zero that matters and not whether it’s positive or negative.
• “The higher the absolute value of the number, the more sensitive customers are to price changes,”
• Products that fall in this category are mostly “pure commodities,” says Avery. “There’s no brand, no product differentiation, and customers have no meaningful attachment to the product.”

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