<p>Counting your quantity in ounces makes sense, I wouldn't change that (I assume each point is a total sales/price combination at a given time?).</p>
<p>If you want to look at the impact of a <em>percentage</em> change in your price, you should take the logarithm of price. A .3 change in log(price) is roughly equivalent to a 30% change in price (more precisely, it is a <code>exp(.3)-1</code> = .350 = 35% change; the .X = X% approximation breaks down fairly quickly).</p>
<p>That said, you do in fact see a downward slope on your demand curve, which indicates that a drop in price is correlated with an increase in sales, although it's a general negative relationship and there's nothing special about 30% in particular (I wouldn't expect there to be!). So you're pretty much showing what you want (discounting issues about statistical significance, or causal identification - if these prices aren't set randomly this isn't technically showing you a demand curve).</p>

CC BY-SA 4.0
2019-02-18T04:41:21.780Z
Thank you Nick is there a good book or source that speaks about "real world demand curves" . When demand curves are not perfectly elastic. and how to deal with promotion periods how that impacts the Demand Curve
John Kelly
CC BY-SA 4.0
2019-02-18T19:28:59.307Z
I'd recommend starting here: http://www.economicsdiscussion.net/demand/empirical-estimation-of-demand-top-10-techniques/19772 
The key thing to get around in your case is that, if the demand curve itself is shifting over time, then the change in price/quantity will actually be revealing something about the supply/producer side of the market. So you ideally want to isolate shifts in price that DON'T come from changes in the demand curve. Promotion periods may be one good way to do that.
NickCHK
CC BY-SA 4.0
2019-02-15T19:38:07.047Z
2022-11-30T08:26:28.313Z
2022-11-30T08:26:28.313Z
NickCHK
<p>I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I be setting up the demand curve differently? on a per product basis? or package size?</p>

<ul>
<li><p>I sell our food product in different package sizes
2oz, 4oz, 9oz , 16oz 3.5lb</p></li>
<li><p>Normalized the time our products were at that price. </p></li>
</ul>

<p><a href="https://i.sstatic.net/RQQCA.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/RQQCA.png" alt="Demand Curve"></a></p>

<supply-and-demand><elasticity><price><demand-system-estimation>
Demand Curve Price not perfectly elastic
John Kelly
# Demand Curve Price not perfectly elastic

(Asked by: username_0 on 2019-02-14)

I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I be setting up the demand curve differently? on a per product basis? or package size?

* I sell our food product in different package sizes
  2oz, 4oz, 9oz , 16oz 3.5lb
* Normalized the time our products were at that price.

[![Demand Curve](https://i.sstatic.net/RQQCA.png)](https://i.sstatic.net/RQQCA.png)

**Tags:** supply-and-demand, elasticity, price, demand-system-estimation


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## 1 answers

### Answer by username_1 on 2019-02-15. Score: 1 | Accepted answer

Counting your quantity in ounces makes sense, I wouldn't change that (I assume each point is a total sales/price combination at a given time?).

If you want to look at the impact of a *percentage* change in your price, you should take the logarithm of price. A .3 change in log(price) is roughly equivalent to a 30% change in price (more precisely, it is a `exp(.3)-1` = .350 = 35% change; the .X = X% approximation breaks down fairly quickly).

That said, you do in fact see a downward slope on your demand curve, which indicates that a drop in price is correlated with an increase in sales, although it's a general negative relationship and there's nothing special about 30% in particular (I wouldn't expect there to be!). So you're pretty much showing what you want (discounting issues about statistical significance, or causal identification - if these prices aren't set randomly this isn't technically showing you a demand curve).

> **Comments:**
> **username_0**: Thank you Nick is there a good book or source that speaks about "real world demand curves" . When demand curves are not perfectly elastic. and how to deal with promotion periods how that impacts the Demand Curve  
> **username_1**: I'd recommend starting here: http://www.economicsdiscussion.net/demand/empirical-estimation-of-demand-top-10-techniques/19772  The key thing to get around in your case is that, if the demand curve itself is shifting over time, then the change in price/quantity will actually be revealing something about the supply/producer side of the market. So you ideally want to isolate shifts in price that DON'T come from changes in the demand curve. Promotion periods may be one good way to do that.  

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