Customers are likely to be less price sensitive when:A. it is easy to compare prices. B. someone else pays the bill. C. the total expenditure is high. D. there are substitutes available. E. their share of the cost is high

Question

Business

Ryan Jones

24 June, 11:16

Customers are likely to be less price sensitive when:A. it is easy to compare prices. B. someone else pays the bill. C. the total expenditure is high. D. there are substitutes available. E. their share of the cost is high

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Answers (1)

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Camilla Bradshaw · Answer 1

Letter E is correct. Their share of the cost is high.

Explanation:

Price sensitivity is characterized by consumer behavior in relation to the price of a product or service.

The degree of price sensitivity can be measured using the price elasticity of demand, which is the study of the percentage change in the amount of demand for a good or service divided by the percentage change in price.

Some variables may affect consumer behavior, price sensitivity may be higher when there are many substitute products and lower when the consumer values a higher quality good and when its profitability is higher compared to the total cost of the product.