Question

A consumer is likely to be more sensitive to the price of a product or service...

A consumer is likely to be more sensitive to the price of a product or service when:

a.

the buying behavior is habitual
b.

the consumer perceives the product or service with a certain reference price in mind
c.

higher prices do not mean higher value
d.

no prior investment been made in the product or service    

          
e.

the consumer is aware of substitutes
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please rate the answer

...

Answer: e) consumer is aware of the substitute

..

Price sensitivity is the degree to which the price of a product affects consumers' purchasing behaviors.In economics, price sensitivity is commonly measured using the price elasticity of demand, or the measure of the change in demand based on its price change. high elasticity means consumers are more sensitive to the price of a product or service.

Demand for a commodity with large number of substitutes will be more elastic. The reason is that even a small rise in its prices will induce the buyers to go for its substitutes. For example, a rise in the price of Pepsi encourages buyers to buy Coke and vice-versa.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
21.The cross-price elasticity between Bob's Beans and Sue’s Cauliflower is 0.4. The cross-price elasticity between Sue's...
21.The cross-price elasticity between Bob's Beans and Sue’s Cauliflower is 0.4. The cross-price elasticity between Sue's Cauliflower and John's Corn is 3.2. An economist would conclude that Sue's Cauliflower and John's Corn are much stronger substitutes than are Bob's Beans and Sue's Cauliflower. Sue's Cauliflower and John's Corn are much stronger complements than are Bob's Beans and Sue's Cauliflower. Bob's Beans and Sue's Cauliflower are substitutes because their cross-price elasticity is less than one. Bob's Beans and Sue's Cauliflower are...
Which of the following describe the consumer price index (CPI)? It: compares the cost of the...
Which of the following describe the consumer price index (CPI)? It: compares the cost of the typical basket of goods consumed in period 1 to the cost of a basket of goods typically consumed in period 2. compares the cost in the current period to the cost in a reference base period of a basket of goods typically consumed in the base period. measures the increase in the prices of the goods included in GDP. is the ratio of the...
A. Pick a consumer good or service that you normally buy and make a table of...
A. Pick a consumer good or service that you normally buy and make a table of the quantity you would buy over a range of prices that includes the actual price today and hypothetical prices both lower and higher. Express in your own words what information this table contains. Now add another column of quantities that estimate your purchases if your income increased by 50%. B. Now estimate the number of consumers in the KSA for the good you choose...
Discussion about - Price is just one of the prime factors. Price obviously is a very...
Discussion about - Price is just one of the prime factors. Price obviously is a very important factor when it comes to product demand because it gives the consumer a second thought if the product is worth its price and also could make one think it is very efficient if not it will not be placed at such price. But the truth is that there other important economic factors that play a role in such decision making there are employment,...
At the federal level, the agency that typically enforces state consumer protection laws is the Attorney...
At the federal level, the agency that typically enforces state consumer protection laws is the Attorney General's office. True False 1 points    QUESTION 2 Tariffs and quotas do which of the following? A. Inflate Prices B. Reduce consumption C. Induce other countries to set up similar barriers D. All of the Above E. None of the above. 1 points    QUESTION 3 Which of the following is a psychological want? A. Tactile sensations B. Assimilation C. Emergency motives D....
14. Which of the following statements is (are) correct? (x) One problem with the consumer price...
14. Which of the following statements is (are) correct? (x) One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called substitution bias. (y) By not taking into account the possibility of consumer substitution, the CPI understates the cost of living. (z) Suppose the typical consumer buys more...
Which of the following is most likely produced in a monopolistically competitive market? a. Automobiles b....
Which of the following is most likely produced in a monopolistically competitive market? a. Automobiles b. Wheat c. Oil d. Fast food e. Soybeans Oligopolists are more sensitive to the pricing and output policies of their rivals when: a. there are many firms in the industry. b. all firms produce identical products. c. there are barriers to entry. d. there is freedom of entry and exit. e. their products are highly differentiated. It is harder to explain the behavior of...
Which of the following is associated with convenience products? high price limited distribution Seldom-purchased items High-involvement...
Which of the following is associated with convenience products? high price limited distribution Seldom-purchased items High-involvement purchasing behavior distribution of the product to many outlets A situation in which a day care provider thinks that parents want better food, when in fact parents are more concerned about their children's security is an example of a gap between __________. consumer expectation and management perception management perception and service quality perception service quality specifications and service delivery consumer expectations and service delivery...
[1] A buyer's demand for a product refers to the amounts of the product the buyer...
[1] A buyer's demand for a product refers to the amounts of the product the buyer would purchase at different: A) prices. B) income levels. C) points in time. D) all of the above. [2] A demand schedule: A) typically indicates that the quantity of a product demanded increases as its price increases. B) indicates the amounts of a product a buyer would purchase at different prices in a defined time period. C) only illustrates buying plans of individuals in...
[5] One reason buyers demand less of a product as its price increases is: A) substitute...
[5] One reason buyers demand less of a product as its price increases is: A) substitute goods are usually available. B) high-priced goods place buyers in higher tax brackets. C) buyers must save more of their incomes as prices increase. D) sellers offer less of the product for sale as its price increases. [6] Which of the following explains why consumers purchase less of a good or service when its price increases? A) A limited income from which purchases can...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT