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when will consumers are more or less price sensitive?

when will consumers are more or less price sensitive?

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Answer #1

Consumers are more price sensitive when-

A) price of a same valued product is higher relative to it's perceived substitute.

B) household expenditure is large or household income is low.

C) There are too many substitute goods available in the market for the product.

Consumers are less price sensitive when-

A) they purchase from a branded company or reputable supplier and they have hard time comparing alternatives.

B) costs of switching vendors are high.

C) people value the product more than it's substitutes.

D) they think that high priced products means better quality.

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