  Price perception by consumers represents a challenge to the ability of a
business to correctly and profitably price and sell their products or services
in a given market and any new target market. Complicating the perception of
prices is the dynamics of price and income elasticity, both of which are key
for estimating demand. This article proposes a novel and elegant identity that
conceptualizes elasticity as a means of quantifying the potential for price
perception problems in a market. Elasticity studies from 1990 to 2023 (n=30)
were sampled to evaluate the relationship between price and income elasticity
for various consumer commodities using the identity. The results suggest that,
given known price and income elasticity values, a business can anticipate
pricing perception problems in advance and address the potential for damaging
distortion of their value proposition. Further, the business can use this
insight to correctly choose a strategic pricing approach.
