What type of analysis would a marketer use to evaluate the impact of changes in price on demand?

Elasticity analysis is crucial for a marketer when evaluating the impact of changes in price on demand. This analysis assesses how sensitive the quantity demanded of a good or service is to changes in its price. By understanding price elasticity of demand, marketers can determine whether a price increase will lead to a significant drop in sales or if a price decrease could stimulate demand.

This type of analysis helps marketers make informed decisions regarding pricing strategies, promotional tactics, and overall market positioning. For instance, if a product has elastic demand, a small price cut might lead to a substantial increase in sales volume, which could offset the lower price. Conversely, if demand is inelastic, even a significant price increase might not substantially affect sales, allowing for higher revenue per unit sold.

Utilizing elasticity analysis allows marketers to optimize pricing for profit maximization while ensuring that they meet market demand effectively. Understanding the elasticity of different products can also guide inventory management, resource allocation, and competitive positioning within the market.