But your product or service does not exist in a vacuum. There are always alternatives, one being not to purchase at all. And we all live in a world of numbers, we compare number and we set ourselves references when we look at different numbers. And price is a number. The result of all of this is that there are price points where a small price change may affect market share and revenue very substantially. These are the Price Cliffs. They are really dangerous because if you price just a tiny bit on the wrong side, you may well miss out of more than half your revenue.
A Price Cliff can be positive or negative. A positive Price Cliff means that if you increase the price, your market share and revenue will also increase. A negative price cliff means that if you increase the price, market share and revenue will drop. Dramatically.