Price Sensitivity
Degree to which demand changes with price.
Formula
Price Sensitivity ≈ Price Elasticity of Demand (PED) = % Change in Quantity Demanded ÷ % Change in Price
Real World
When petrol prices rise sharply, most UK drivers still fill up because they have few alternatives — demonstrating low price sensitivity (inelastic demand).
Exam Focus
Link price sensitivity explicitly to PED values; state whether demand is elastic or inelastic and justify why.
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