Of course you're right that pricing is not easy. Your list of other considerations is also very good (sounds like you've taken a course in industrial organizati

Of course you're right that pricing is not easy. Your list of other considerations is also very good (sounds like you've taken a course in industrial organization). The only other main idea I want to add is that price is just one of the ways that firms compete with one and other (Bertrand competition). Firms also compete with each other over quantity (Cournot competition), and among other general dimensions like quality (i.e. product differentiation). In order to have good estimates of price elasticity via a derived demand function, one would also need to consider the price and features of competing products in that demand function (which would enable the use of other economic measures of marginal effects like cross-price elasticity of demand). Your competitor's price is just as important as your own price because of substitution effects.