03 Jun Pricing2 Constant Elasticity – June’s Free MBTN Tutorial

This month’s free MBTN tutorial addresses pricing decisions under conditions of constant elasticity, and is co-authored by Paul Farris and Phil Pfiefer of the Darden School of Business at the University of Virginia. Unlike linear functions, constant elasticity functions exhibit a different slope, but the same elasticity at each point on the curve. This means the slope is changing at a very specific rate to keep elasticity constant. A mathematical equation for this relationships is Q = kP℮ where e is the price elasticity of demand and k is a constant that represents the quantity the firm would sell at a price = $1. Discover how to find the profit maximizing price under these conditions in this month’s tutorial.

Pricing 2 covers the following topics:
– The relationship between price and quantity
– Elastic demand and inelastic demand
– How to calculate the optimal price under conditions of constant elasticity

The free link has expired, but check out this month’s tutorial under the Business Education Resources Blog.

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Best regards,
Your Team at MBTN Academy

We hope you enjoyed this month’s tutorial on pricing decisions under conditions of constant elasticity.

Best regards,
Your Team at MBTN Academy

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