If the initial price quoted by the supplier is greater than the market value of the product, the first buyer buys less than the supplier expected. The Sales agent initially lowers the price, which brings the quantity purchased closer to the optimum quantity and provides an initial estimate of the buyer's demand curve. Thereafter, the Sales agent attempts to maintain the price at the optimum value, ensuring that subsequent buyers purchase the optimum quantity. The demand curve and the value of the remaining inventory curves obtained from the experiments are plotted in Figures and .
Subsequent prices are lower and yield approximately optimal sales.
Figure represents the total value of the remaining inventory against price for each of the subsequent sites visited. The curves are truncated on the left at a price sufficiently low that the first buyer will purchase the entire inventory, and on the right at a price such that the buyers purchase nothing. The peaks of these curves represent the potential maximum returns to the seller. However, these prices are relatively low prices that would result in a very large sales volume. Given a small remaining inventory, the Sales agent opts for a higher price and lower sales to each buyer, such that the inventory will be exhausted after the last buyer.