He said "in between", not "exactly half way". The best way to draw a demand curve would be to get some data at the half-way point. // random person on the internet
But presumably the authors wants to maximize revenue while conducting experiments. Pricing at the midway point would seem to be the lowest risk way of getting additional data.
Comments
He said "in between", not "exactly half way". The best way to draw a demand curve would be to get some data at the half-way point. // random person on the internet
The optimum point might lie outside. The curve might even dip in between the two price points.
Edit: The operative word here is 'might'.
Yes, it might.
But presumably the authors wants to maximize revenue while conducting experiments. Pricing at the midway point would seem to be the lowest risk way of getting additional data.
True, but wouldn't you agree that nl's suggestion is the maximum likelihood guess?