Your product's demand is elastic or inelastic?

 When you lack previous data to determine demand elasticity for your product, you can still make an educated guess using a few key strategies:

1. Understand the Nature of Your Product:

• Necessities vs. Luxuries: Products considered necessities tend to have inelastic demand, meaning people will buy them regardless of price changes. Luxuries, on the other hand, tend to have elastic demand.
• Availability of Substitutes: If there are many substitutes available, your product likely has more elastic demand because customers can easily switch to another option if the price increases.
• Time Frame: Demand elasticity can change over time. In the short term, demand might be inelastic, but over time, as consumers find alternatives or adjust their preferences, it may become more elastic.

2. Conduct Market Research:

• Surveys and Focus Groups: Ask potential customers how they would react to different price points. Would they still purchase the product if the price increased by a certain percentage?
• A/B Testing: Test different prices in different markets or among different groups to see how price changes affect sales.

3. Analyze Competitors:

• Look at how similar products are priced and how their sales change with price fluctuations. This can give you insights into the elasticity of your own product.

4. Customer Income Sensitivity:

• Products that take up a larger portion of a consumer’s income tend to have more elastic demand because price increases can significantly impact the consumer's budget.

5. Trial and Error:

• You can start with a price and observe the sales trend. If sales drop significantly after a small price increase, your product might have elastic demand. Conversely, if sales remain stable, the demand might be inelastic.

Using these strategies, you can get a better sense of whether your product's demand is elastic or inelastic, even without extensive historical data.