Computing optimum price

Posted by DBtoo on Jan 23, 2007; 1:39pm
URL: http://spssx-discussion.165.s1.nabble.com/Computing-optimum-price-tp1073399.html

I am a statistical novice but need an equation or tool to relate volume to price.  If one assumes (based on daily data points) an increase in price will both reduce volumn but also increase margin (profit) then the question becomes how high the price can go before the decrease in volume causes less profit even a higher margin.  We will also factor in cost but that is not essential in this part of the analysis.  For these purposes we can assume cost is constant.  The same with the variable of competitor's prices.  We will assume that will be absorbed in the impact on volume.

Can anyone point me to a resource or does anyone have a formula (equation) already worked out?

Thanks!!!