The concept of a price sensitivity matrix applies to Tesla's decision in that it reflects the relationship between price and demand. In Tesla's case, they understood that price sensitivity is a significant factor in the adoption of electric vehicles. By lowering the prices of their vehicles, they were able to increase demand and sell more cars. This decision shows an understanding of the price sensitivity matrix, where a decrease in price can lead to an increase in demand, especially in a market where price is a significant barrier to entry.
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