Avocado demand is inelastic: a 1% price increase is associated with a 1% decline in units sold (overall elasticity = -1, R² = 0.986). Conventional avocados have an elasticity of -0.94 vs -1.75 for organic, suggesting organic buyers are less price-sensitive. The revenue-maximizing price point is approximately $0.6.

The estimated price elasticity of demand is -1.002 (95% CI: -1.028 to -0.975). This means a 1% increase in price is associated with a 1.002% change in quantity demanded. The model explains 98.6% of variation in log sales volume after controlling for type, region, and year.

Conventional avocados have a price elasticity of -0.944 while organic avocados have an elasticity of -1.752. The difference of 0.808 elasticity units indicates organic buyers are more price-sensitive than conventional buyers. Both estimates control for region and year fixed effects.

Across 54 US regions analyzed, Buffalo Rochester shows the highest price sensitivity with an elasticity of -1.493. The chart shows the 10 most price-sensitive regions. Regions with more negative elasticity have consumers who react more strongly to price changes — useful for targeting promotional pricing.

The log-log scatter confirms a clear negative linear relationship between log(price) and log(volume), consistent with constant price elasticity = -1.002. Color separates conventional (higher volume) from organic (higher price) avocados. The slope of this relationship is the elasticity estimate. R² = 0.986.

Weekly sales volume shows seasonal peaks and an upward trend in conventional avocado demand over the 2015–2018 period. Organic avocado volumes are consistently lower but growing faster in relative terms. Seasonal demand spikes (especially around Super Bowl and spring months) can temporarily alter the price-elasticity relationship.

Based on the estimated elasticity (|e| > 1), revenue is highest at the lowest tested price of $0.6 (predicted revenue ≈ 96,131 units × $0.6). The curve is monotonically decreasing across the tested range — every price increase beyond $0.6 loses more volume than it gains in margin. This reflects the strongly elastic demand estimated for avocados: consumers are highly responsive to price changes in this category.

The residuals plot shows whether the constant-elasticity assumption holds. A random scatter around zero with no funnel or curved pattern confirms the model is well-specified. Systematic patterns would indicate the true demand curve is non-constant-elasticity and a more flexible model might be needed. The log-log model achieves R² = 0.986.