Test
General
- 5 learners; individual projects
- 5 hours per learner
- Dates set by teams
- Learners self-assign
Preferred companies
- 12 projects wanted
- Vancouver, British Columbia, Canada
- Academic experience
- Any company type
- Any industries
Categories
Skills
Overview
- Learner goals and capabilities
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Price elasticity of demand is an important concept when pricing goods and services in the marketplace. Early stage start-ups can have a difficult time pricing their market offerings. One tool start-ups may use to determine an appropriate price is elasticity. Price elasticity is a metric used to gauge how much buyers and sellers respond to changes in market conditions and, ultimately, the revenue that could be earned by the start-up. In this activity, students will prepare a policy brief for an early stage start-up to determine the price elasticity of demand for its market offering(s).
- Expected outcomes and deliverables
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Students will work with a participating early-stage start-up company from an incubator, accelerator, or innovation centre. They will analyze the start-up’s product/service, consumption patterns of the product/service, competitors, pricing, and branding to estimate the price elasticity of demand. They will explore the effects of price increases and decreases on quantity demanded based on research conducted on the industry.
Students will estimate the price elasticity of demand using various resources provided by the start-up (i.e., business plan, financial model, and marketing plan) and industry sources and databases.
Project Examples
An important consideration when setting a price for a market offering is to find a price that has inelastic demand, meaning that when the price rises, buyers will continue to purchase the market offering. In many cases, start-ups may not have a product that has inelastic demand. Therefore, they require an analysis of their price-setting strategy in conjunction with the nature of the product/service, competitors, and the brand. Price elasticity of demand measures how much the quantity of an offering demanded responds to a change in price. How does total revenue change as one moves from elastic to inelastic demand? If demand is inelastic, then an increase in price causes an increase in total revenue. If demand is elastic, an increase in the price causes a decrease in total revenue.
Additional company criteria
Companies must answer the following questions to submit a match request to this experience:
Provide a dedicated contact who is available to answer periodic emails or phone calls over the duration of the project to address students' questions.
Be available for a quick phone call with the instructor to initiate your relationship and confirm your scope is an appropriate fit for the course.