For price to be effective as a demand management tool, the marketing manager must have some sense of the shape and slope of a product's demand curve at a particular point in time.

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Pricing can be an effective tool for managing demand, but the marketer must have an understanding of the product's demand curve. The slope and shape of the curve will determine how customers respond to price changes, and the marketer can use this information to set prices that will achieve the desired level of demand.

For Price to Be Effective as a Demand Management Tool