Supply and demand for managerial economics
Demand depends upon:
1. Price
2. Income
3. Tastes/preferences
4. Related products
5. Expectations of the buyer
6. What others do and/or want
7. Geopolitical events
Simple Elasticity Example
Price Quantity Total Revenue
$0 20
1 16
$0
16
2
3
4
5
12
8
4
0
24
24
16
0
General Rule: If price goes down and total revenue goes up, then demand is elastic. If price goes down and total revenue goes down, then demand is inelastic.
Mathematically: % change in quantity divided by % change in price
From $5 to $4: % change in quantity is 4/2 or 2; % change in price is 1/ 4.5 or .22
2/.22 = 9.1, so elastic
From 4 to 3: 4/6 or .67 divided by 1/5.5 or .29; .67/.29 = 2.3, so elastic
From 3 to 2: 4/10 or .40 divided by 1/2.5 or .40; .40/.40 = 1, so unitary elastic
From 2 to 1: 4/14 or .29 divided by 1/1.5 or .67; .29/.67 = .43, so inelastic
From 1 to 0: 4/18 or .22 divided by 1/.5 or 2; .22/2 = .11, so inelastic

Supply depends upon:
1. Price
2. Technology
3. Related goods
4. Weather
5. Geopolitical events
6. Expectations of the seller
In the Short Run only one thing changes.
In the Long Run companies/buyers can adjust—new entrants into the market, substitutes can be developed, etc.
How might you determine the demand for your product?
How about for a new product?
More on Elasticity:
Elasticity is simply a measure of responsiveness of a dependent variable to a change in the independent variable. We can measure this responsiveness to any of the independent variables.
Price elasticity of Demand
Price elasticity of Supply
Cross price elasticity of Demand (or Supply)
Income elasticity of Demand
And so on

If you have the demand equation you can use calculus to determine the elasticity at this point (point elasticity, as opposed to arc/midpoint elasticity from above)
To do this take your estimated equation (from multivariate regression)
Take the partial derivative and multiply it by the point:
Q
D
/ P x P/Q
Example: Q
D
= 9 - .08 P + .07 Y
First Derivative wrt P is -.08
First Derivative wrt Y is .07
Now pick a point, i.e., fixed income and price levels, then compute elasticity at that point.