By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Bumidan have to taken into consideration that Consoles are considered price elastic?

"The mean monthly price elasticity (i.e. averaged over the 89 months) for the videogame consolesestimated using our data is -3.680. This indicates considerable price sensitivity for these consoles"

http://209.85.141.104/search?q=cache:cNYYRDVQViQJ:faculty.chicagogsb.edu/pradeep.chintagunta/research/Forthcoming%2520Papers/JAE_VideogameConsoles.pdf+Price+elasticity+of+consoles&hl=en&ct=clnk&cd=5&gl=nz

That means that when the price decreases the total revenue from sales of consoles increase. So I think you assumption is flawed from that perspective. I forgot the maths but I think you should use some sort of elasticity formula to apply to your analysis. Then apply the increased expected revenue to plug into your accessorie/game/services formulas.



Tease.