| Course | DBA-8020 Seminar in Economics and Finance Models and Matrices of Sustainability |
|---|---|
| Module | Module 2 |
| Paper type | Module 2 written assignment: the market demand curve and consumer theory |
| Length | About 504 words, 4 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Doctor of Business Administration |
| Updated | October 2026 |
Free sample paper for DBA 8020 Module 2
Revenue Peaks at $10, Profit at $12: Reading a Demand Curve for a Refill Subscription
Student Name
Doctor of Business Administration, Thomas Edison State University
DBA-8020: Seminar in Economics and Finance: Models and Matrices of Sustainability
Mentor Name
Month Day, Year
Revenue Peaks at $10, Profit at $12: Reading a Demand Curve for a Refill Subscription
From Individual Choices to Market Demand
Saros (2020) explains that a market demand curve is the horizontal sum of individual demand curves: at each price, the quantity demanded is the total of what all buyers would purchase. Individual demand reflects preferences, income and the prices of substitutes, here ready-to-use spray cleaners. Because our product is new, no sales history exists, so demand must be estimated from what households say they would do.
Estimating Demand
We surveyed 1,000 households in our three launch regions, asking whether they would subscribe at one of five monthly prices, each household seeing one price. Miller et al. (2011) compared methods of measuring willingness to pay and found that direct survey questions tend to overstate it relative to incentive-compatible methods, so we reduced stated adoption by a fifth, in line with our pilot's experience.
The demand curve slopes downward as theory predicts, and fairly steeply: each $2 increase loses 30 to 40 subscribers per thousand households.
| Monthly price | Subscribers per 1,000 households | Revenue per 1,000 | Profit per 1,000 at $4.50 unit cost |
|---|---|---|---|
| $8 | 220 | $1,760 | $770 |
| $10 | 180 | $1,800 | $990 |
| $12 | 140 | $1,680 | $1,050 |
| $14 | 105 | $1,470 | $997.50 |
| $16 | 75 | $1,200 | $862.50 |
Elasticity
Price elasticity tells us how strongly the number of subscriptions sold reacts when the price moves. Using the midpoint formula:
Demand turns elastic above $10. That is why revenue peaks at $10: below it, raising price increases revenue because quantity falls proportionally less; above it, revenue falls.
| Price range | Percent change in quantity | Percent change in price | Elasticity |
|---|---|---|---|
| $8 to $10 | negative 20.0 | 22.2 | negative 0.90 (inelastic) |
| $10 to $12 | negative 25.0 | 18.2 | negative 1.38 (elastic) |
| $12 to $14 | negative 28.6 | 15.4 | negative 1.86 (elastic) |
Why Profit Peaks Higher
Revenue maximization ignores cost. Each subscription costs about $4.50 a month to fill and ship, so profit per thousand households peaks at $12, where the margin on the remaining subscribers outweighs the subscribers lost. A firm maximizing profit should not set price where revenue peaks unless marginal cost is zero.
Limits of the Estimate
The demand schedule is a snapshot. It assumes competitors' prices stay put, ignores word of mouth that could shift demand outward over time, and treats the survey households as representative. Because loss aversion slows switching, as Module 1 found, demand may grow as early users show neighbors the product works.
Recommendation
Launch at $12 a month, the profit-maximizing price in the survey, with a first month at $8 to lower the barrier to trying, which addresses the behavioral obstacles seen in Module 1; framing the first month as a low-cost trial uses the mental accounting Thaler (1980) described. Revisit price after six months using actual subscription, cancellation and referral data.
Conclusion
The survey yields a downward-sloping demand curve whose elasticity rises with price. Revenue peaks at $10 and profit at $12, and a $12 launch price with an introductory offer balances profit with the need to overcome switching costs.
References
Miller, K. M., Hofstetter, R., Krohmer, H., & Zhang, Z. J. (2011). How should consumers' willingness to pay be measured? An empirical comparison of state-of-the-art approaches. Journal of Marketing Research, 48(1), 172-184. https://doi.org/10.1509/jmkr.48.1.172
Saros, D. E. (2020). Principles of political economy: A pluralistic approach to economic theory (3rd ed.). Valparaiso University.
Thaler, R. (1980). Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization, 1(1), 39-60. https://doi.org/10.1016/0167-2681(80)90051-7
What the DBA 8020 Module 2 instructions ask for
Three written assignments in DBA-8020 share 24 percent of the grade. This one covers the market demand curve and consumer theory. Expect to explain how market demand is built from individual choices, estimate or analyze a demand schedule, compute price elasticity and use the results for pricing. Show calculations in tables, explain each result with theory and state the limits of your demand estimate, since real demand curves are estimated with error. State how the demand data were gathered and adjusted, and compute elasticity over at least two price ranges so the shift from inelastic to elastic demand is visible. Show revenue and profit in the same table.
How the DBA 8020 Module 2 example is put together
The paper explains market demand as the sum of individual demand. A section describes a survey and adjusts stated willingness to pay with research on measurement bias. A table gives demand, revenue and profit at five prices. A second table computes midpoint elasticities and the text links elasticity to the revenue peak. Sections explain why profit peaks at a higher price, state the estimate's limits and recommend a launch price. A limits section names three assumptions behind the estimate, and the recommendation pairs the profit-maximizing price with an introductory offer tied to the behavioral findings of Module 1. Two tables carry the analysis: demand, revenue and profit by price, and elasticity by price range. Survey answers are scaled down for known overstatement.
Where the marks sit in the DBA 8020 Module 2 rubric
Mentors grade written assignments on correct economic analysis, accurate calculations, application to a real decision and doctoral-level writing. Papers that link elasticity to the revenue peak, and explain why profit peaks elsewhere, show understanding beyond calculation. Adjusting survey data for known biases demonstrates methodological care. Stating the estimate's limits shows scholarly honesty. Separating revenue from profit maximization, with cost included, shows command of the economics of pricing. An introductory offer tied to earlier findings shows integration. Stating the estimate's limits, from competitor prices to word of mouth, shows scholarly caution. A recommendation to revisit price with real data shows the analysis guiding an ongoing decision rather than a one-time choice. Clear tables let mentors check each step.
DBA 8020 Module 2 help: mistakes that cost marks
Students lose points by computing elasticity with the wrong base, by confusing revenue and profit maximization or by treating survey answers as true demand. Others ignore cost. Use the midpoint formula. Show revenue and profit separately. Adjust for survey bias. Explain your results with theory. Include unit cost so you can find the profit-maximizing price, not only the revenue peak. Say how you will update the estimate once real sales data arrive, and which subscriber metric you will track weekly. A free first sample on your own DBA-8020 demand assignment is available on request. Show the elasticity calculation for at least one price range so the reader can check the arithmetic.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
More DBA 8020 and Doctor of Business Administration sample papers
- DBA 8020 Module 1: Discussion: Would Rational Shoppers Switch to Refill Concentrates?
- DBA 8020 Module 3: Written Assignment: Market Structure in Household Cleaning Products
- DBA 8020 Module 4: Discussion: How the Fed's Rate Path Affects a Refill Launch
- DBA 8020 Module 5: Written Assignment: Who Pays a Plastic Packaging Fee?
- DBA 8020 Module 6: Final Paper: An Economic Case for Launching a Refill Concentrate Subscription
- DBA 8060 Module 6: Written Assignment: Optimizing Safety Stock and Simulating Expedite Costs
- OML 8020 Module 6: Culture Research Seminar Paper: Meta-Analytic Tests and the Future of Culture Studies
- OML 8030 Module 1: Classic Change Models Seminar Paper: Lewin, Kotter and the 70 Percent Myth
- DBA 8010 Module 1: Written Assignment: Globalization Drivers for a Natural Food Color Maker
DBA 8020 Module 2 questions, answered
Where can I find a free DBA 8020 Module 2 sample paper?
Demand and elasticity estimates for a refill subscription are worked in the assignment above.
How is a market demand curve derived?
By adding individual demand curves horizontally, summing quantities demanded at each price.
What does it mean when demand is elastic?
Quantity changes proportionally more than price, so raising price lowers revenue.
Why do the revenue-maximizing and profit-maximizing prices differ?
Because profit depends on cost; with positive marginal cost, the profit-maximizing price is higher.
Why adjust survey estimates of willingness to pay?
Direct survey questions tend to overstate what people will actually pay.