Price sensitivity, also known as price elasticity of demand, is a measure of how the demand for a product changes with a change in its price. If a product is highly price sensitive, a small change in price can lead to a significant change in the quantity demanded. This can affect sales volume as a higher price may lead to a decrease in sales volume if the product is highly price sensitive. Conversely, a lower price may increase sales volume. Understanding price sensitivity can help businesses set optimal prices and predict sales volume more accurately.
Take the most advantageous pricing approach to increase profitability of your organization. Use our...
Download template