Figure 3.2 Classic Price/Demand Curve (Green Bow): As price drops demand (price score) rises. Scores drop above and below the price range (orange arrows).

Price ranges for Round 0 (the year prior to Round 1) are published in the Industry Conditions Report and the Segment Analysis pages of the Capstone Courier.

Price Rough Cut

Sensors priced $5.00 above or below the segment guidelines will not be considered for purchase. Those products fail the price rough cut.

Sensors priced $1.00 above or below the segment guidelines lose about 20% of their customer survey score (orange arrows, Figure 3.2). Sensors continue to lose approximately 20% of their customer survey score for each dollar above or below the guideline, on up to $4.99, where the score is reduced by approximately 99%. At $5.00 outside the range, demand for the product is zero.

Price Fine Cut

Within each segment’s price range, price scores follow a classic economic demand curve (green curve, Figure 3.2): As price goes down, the price score goes up.

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