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In which one of the following services price sensitivity is high?

In which one of the following services price sensitivity is high? Correct Answer Airlines

The correct answer is Airlines.

Key PointsPrice Sensitivity - The degree to which demand fluctuates as a product's or service's price changes is known as price sensitivity. price sensitivity is measured usually with the help of price elasticity of demand, which implies that certain buyers won't pay more if a lower-priced choice is available, is a typical method for measuring price sensitivity.

Important Points

Understanding of Price Sensitivity -

  • Customers who are highly price sensitive are less likely to purchase a product because they believe the seller has unfairly overvalued it and likely to choose another product over the one they were considering buying.
  • On the other side, low price sensitivity suggests that customers are prepared to pay the asking amount and possibly even more.

In above question, people will be highly price sensitive for the airlines. When an airline decides to slightly increase the cost of a ticket to travel then customers will switch to a less expensive choice like train transportation.

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