Hello, I'm Jeremy, and I would like to introduce to you today the concept of drivers of elasticity. You know what elasticity is? This is how much your volume would move when you change your price up or down. What I'd like to give you today is some of the secrets of what drives the elasticity. You don't to always measure elasticity, sometimes it is really hard to do so, and so, having a sense about what will drive the elasticity to be higher or lower is really helpful. There are actually three fundamental drivers of elasticity. The first one, quite obviously, is the demand curve. That means, how many customers are going to be willing to pay a high price point for the products, and how many are going to be willing to pay a lower price point for the products. That's the shape of your demand curve. The second one is your share. If you are a large play in the market place, a few customers switching to you will not represent that much volume. Your elasticity is going to be lower. But if you're a very small player, you can have a few customers representing a large proportion of your volume, and that means you're going to have a higher elasticity. The third driver of elasticity is the distribution of prices that competitors have in the marketplace. One single competitor of one single price points will have a different elasticity from a range of competitors with a range of price points. Let's go through these step by step. So the first step is understanding the demand curve and how it drives elasticity. By now you know the demand curve and how it flows from customers willing to pay high price points, to customers willing to pay a low price point. And it has different shapes. It's not a smooth straight line, it's neither a curve that goes down completely perfectly. It has some bumps, and you will want to take advantage of these bumps because these are the places where the elasticity is right at the sweet spots. In other words, the elasticity is driven by the slope of that curve, and you really want to be at a point where you going to take the maximum number of customers for a given price points in order to get the maximum profits. As you can see here, when you start at the price with $50, not many people want to buy that, but you really want to have the maximum volume, and so that bump is going to work you really well for you. This is true for the second product, the third product, and the fourth product. You can see the shape of that demand curve here determines that. In that particular market, four products would be ideal right at the price point that they are. If you were to put them at slightly higher or slightly lower price points, the rectangles that here represent your revenues, would be slightly lower than the optimum, which is why pricing right within the bumps of the demand curve is the ideal price points for each of your products. That's how the demand curve shapes your elasticity with a slope.