2006-07-26 12:50:43 · 4 answers · asked by djaw1968 1 in Business & Finance ➔ Advertising & Marketing
Price sensitivity is the correlation of one security with the movement of another. For example, when the price of gasoline/oil increases by 5%, the electricity rates go up by 0.5%. This shows how one variable is dependent on the movement of the other. 1.0 would be perfectly correlated and -1.0 would be inversely related.
2006-07-26 13:00:52 · answer #1 · answered by J 4 · 2⤊ 0⤋
Price sensitivity has to do with how sensitive a purchaser (customer) is to an increase or decrease in the current price. An example is gasoline in the US- experts speculated that as gas prices rose, consumption would decrease. As of now, this is not true. Consumption has not decreased, so customers are not at a point to change their driving habits to offset the additional costs of driving. People are only price sensitive when consumers' behaviors change.
2006-07-26 19:55:46 · answer #2 · answered by susie 4 · 0⤊ 0⤋
This is another interesting area of consumer behavior. How much are people willing to pay for a purchase? At what point will a rising price turn people away? Price sensitivity is the barometer of how much a customer will pay.
2006-07-27 03:54:08 · answer #3 · answered by catzpaw 6 · 0⤊ 0⤋
When prices fluctuate rapidly due to market conditions.
2006-07-26 19:55:01 · answer #4 · answered by helixburger 6 · 0⤊ 0⤋