Which of the following best describes the sunk-investment effect on price sensitivity?
A. Customers are less price-sensitive when there are no acceptable substitutes for a product.
B. Customers are less price-sensitive when the purchase is necessary to gain full benefit from assets previously bought.
C. Customers are less price-sensitive when their expenditure for the product or service is a relatively low proportion of their total income.
D. Customers are less price-sensitive in the short run when they cannot store large quantities of the product as a hedge against future price increases.
Answer:B
Which of the following best describes the sunk-investment effect on price sensitivity?
A. Customers are less price-sensitive when there are no acceptable substitutes for a product. B. Customers are less price-sensitive when the purchase is necessary to gain full benefit from assets previously bought. C. Customers are less price-sensitive when their expenditure for the product or service is a relatively low proportion of their total income. D. Customers are less price-sensitive in the short run when they cannot store large quantities of the product as a hedge against future price increases.