The Salty Pawz margins are good, but would Wanda be better off by lowering prices and potentially selling more? Would dropping her price even make a difference, or would she just be giving away her profits? What would be the impact on demand if she reduced her price?

Use the "Supply and Demand" data beginning on page 8 of the Salty Pawz Case Study. The information there illustrates the potential impacts on quantity supplied and quantity demanded at various price points for Salty Pawz products.

Using the charts and data, create a graphical representation of Supply and Demand Curves for the four Salty Pawz products that Wanda sells.
For each product, determine the equilibrium point where Quantity Supplied = Quantity Demanded.

The dropping of her price will make a big difference. Lowering the price of goods or services have an effect on demand. This is because, as the price goes up, the quantity demanded goes down and when the price decreases, quantity demanded will also increases.

On the fact that lowering your prices affects profits. This is a Question of Profit. Note that if the costs of your item is the same, lowering prices to increase sales will also lowers the profit margin that one can make on each unit item that was sold.

But studies has shown that lowering prices will lead to greater sales volumes, which may stand in the gap for the lower profit margin.

Lower or reduction in prices tend to affect or influence demand a great deal as it said to increase the interest in a product leading to an increase in quantity demanded.

From the graph, we see that the increase in price brought quantity demand down will at lower price, quantity demand were more.

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