How do companies use price elasticity to improve their business?
A)By separating customers into groups, companies can attract different groups with different prices.
B)Companies can force everyone to pay the same price regardless of demand.
C)Companies can ignore price elasticity, it cannot improve business.
D)Customers are all the same and price elasticity is the same for all of them.
E)None of the above.

Question

Quizplus · Accepted Answer

By separating customers into groups based on their price sensitivity and willingness to pay, companies can offer tailored pricing strategies to attract different groups. This can help improve business by increasing sales and revenue, and also ensure that each customer is paying a price that maximizes their perceived value for the product or service. This approach is based on price elasticity, which measures the responsiveness of demand to changes in price.

How Do Companies Use Price Elasticity to Improve Their Business