Individual skill

economic-analysis

Applies microeconomic frameworks - supply and demand, elasticity, marginal analysis, market structure, externalities - to a business decision and produces a recommendation with explicit assumptions and a sensitivity analysis showing which assumption flips the answer. Use when someone asks "what happens to revenue if we raise prices", "will profits in this market hold up", "how will competitors respond to this move", or needs the economic logic behind a pricing, entry, capacity, or regulation question. Do NOT use for setting a specific price point or packaging tiers - use pricing-strategy or saas-pricing instead; for putting a dollar figure on market size, use market-sizing instead.

skills/economic-analysis/SKILL.md

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License: MIT

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# Economic Analysis

Economic reasoning makes the incentives and trade-offs behind a decision explicit - and shows which assumption the whole conclusion hangs on. The costly failure this skill prevents is the confident recommendation built on an unstated elasticity guess: small changes in that one number flip "raise prices" into "lose the market," and nobody notices until revenue does.

## Inputs to collect

1. **The decision**: the specific choice being made (raise price, enter market, add capacity, respond to a rival).
2. **The actors**: buyers, sellers, regulators - and who the analysis is for.
3. **The good or service** and its closest substitutes and complements.
4. **Market structure evidence**: number of competitors, differentiation, entry barriers.
5. **Any real data**: past price changes and volume responses, cost breakdowns, competitor prices. Real data beats framework defaults; where data is absent, state the assumed value and label it a guess.

## Operating procedure