Price sensitivity refers to the degree to which consumers are influenced by changes in the price of a product or service. It is a measure of how responsive individuals are to fluctuations in price, and how likely they are to alter their purchasing behavior based on these changes. A highly price sensitive consumer is more likely to switch to a cheaper alternative or forego a purchase altogether if the price of a product increases, while a less price sensitive consumer may be willing to pay a higher price for the same product. Price sensitivity is an important factor for businesses to consider when setting prices and developing marketing strategies, as it can greatly impact consumer demand and overall sales.