Customers Are Likely to Be Less Price Sensitive When

question 5

Multiple Choice

Customers are likely to be less price sensitive when:

• A) it is easy to compare prices.
• B) someone else pays the bill.
• C) the total expenditure is high.
• D) there are substitutes available.
• E) their share of the cost is high.

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Definitions:

Increases In Interest Rates

A scenario where central banks or financial institutions decide to raise the cost of borrowing money.

Cap

An upper limit set on the amount of money that can be charged or paid in a certain situation, such as interest rates on a loan or fees.

Cross-Hedging

Cross-hedging involves using a hedge to manage risk by investing in a financial instrument that is not directly correlated to the underlying asset but has similar price movements.

Hedge Price

A price locked in through hedge contracts to reduce exposure to price fluctuations of commodities, currencies, or securities.