Price elasticity is a measure of the change in a product's sales volume in response to a change in price. Most nonessential consumer goods (including food and wine) have a negative elasticity: when the price goes down, the volume goes up, and vice versa.
The elasticity values in the Price Max model were developed after many months analysis by Ste Michelle Wine Estates's Business Intelligence team, and are representative of elasticity coefficients commonly found in the industry.
Please be advised, however, that the results are illustrative; there are many factors that influence a customer's buying decisions and no pricing model can guarantee 100% accuracy. For further reading on price elasticity in the wine business we would suggest a visit to the American Association of Wine Economists at http://www.wine-economics.org/.