When the insurance industry recently announced a "hefty" price increase in the cost of term life insurance, sales of this type of insurance did not decrease. This is an example of what concept in understanding consumer price sensitivity?
A) Insurance demand is unitary.
B) Consumers are less price sensitive to products bought infrequently.
C) Insurance sales reps can "really sell" their products.
D) Customers are most sensitive to products that are bought frequently.
E) Customers are less sensitive to disposable products.

Question

Quizplus · Accepted Answer

This concept is known as "low price sensitivity for infrequently purchased products." Consumers are more likely to be less sensitive to price increases for products they do not purchase often, such as term life insurance.

When the Insurance Industry Recently Announced a "Hefty" Price Increase