Lowering your price may help you increase revenue, but lower it too much and you cost yourself money. (via Understanding App Store Pricing — Part 3 — Jury.me )

Loosely speaking, we refer to situations where a percentage change in price leads to a larger percentage change in quantity sold as elastic. Situations where a the percentage change in price and quantity sold are roughly equal are called unit elastic. And situations where a percentage change in price leads to a smaller percentage change in quantity sold as inelastic.

Part 4:

Generally speaking, the elasticity of demand is affected by factors such as:

  • Availability of substitute goods
  • The necessity of the good
  • Who’s paying for it
  • Brand awareness and respect
  • The percentage of income the purchase represents to the buyer