The Observation That Consumers Are Generally More Sensitive to Price

question 112

Multiple Choice

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

• A) most consumers cannot remember what price they paid the last time they bought a particular product.
• B) it is easier to lose customers with a price increase than to gain customers with a price decrease.
• C) most consumers would rather skip buying a product than pay a higher price.
• D) most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes.
• E) firms gain more customers with price decreases than they lose with price increases.

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Definitions:

Multiple Suppliers

The strategy of sourcing a particular product or service from more than one supplier to reduce supply risk.

Supply Disruption

An unexpected event that interrupts the normal flow of goods and materials in a supply chain, potentially leading to stockouts, increased costs, or delivery delays.

Incentive

A factor, often a form of reward or penalty, that motivates individuals to perform an action or behave in a certain manner.

Fewer Suppliers

A procurement strategy where a company intentionally reduces the number of suppliers in its supply chain to improve efficiency and negotiate better terms.