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

Elasticity analysis is employed by marketers to assess how the quantity demanded of a product responds to changes in various factors, particularly price. This concept of elasticity helps determine the sensitivity of consumers to price fluctuations. If a price increase leads to a significant drop in demand, the product is considered to have elastic demand. Conversely, if demand remains relatively stable despite price changes, it indicates inelastic demand.

Marketers utilize this analysis to make informed pricing decisions, understand consumer behavior, and predict revenue outcomes. By identifying whether demand for a product is elastic or inelastic, businesses can better strategize their pricing, maximize revenue, and enhance their overall marketing approach.

The other types of analysis mentioned—such as differential, trend, and regulatory analysis—serve different purposes. Differential analysis typically focuses on comparing the costs and benefits of different marketing options without directly addressing pricing’s impact on demand. Trend analysis looks at data over time to identify patterns, which is useful for forecasting but not specifically for understanding price demand relationships. Regulatory analysis pertains to assessing the effects of laws and regulations on the market, which does not directly evaluate price sensitivity. Therefore, elasticity analysis is the most relevant approach for evaluating how changes in price affect demand.