Which term describes people being sensitive to a product's price?

• A. Product Range
• B. Niche Market
• C. Price Elasticity
• D. Price Inelasticity

Answer: (D)

Price sensitivity is measured by price elasticity of demand. It shows how much the quantity demanded changes when price changes. If people react a lot to a price change, demand is elastic, meaning they are sensitive to price. If they barely change how much they buy when price moves, demand is inelastic. So the term describing sensitivity to price is price elasticity of demand. The other terms don’t describe sensitivity: product range is the variety of products offered, and a niche market is a small, specialized customer group; price inelasticity describes low sensitivity, the opposite of what’s asked.