In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. Here are the top six reasons why customer satisfaction is so important:
1 When the price elasticity of demand for a good is unit (or unitary) elastic (E d = 1), the percentage change in quantity is equal to that in price, so a change in price will not affect total revenue.2  When the price elasticity of demand for a good is relatively elastic d. When the price elasticity of demand for a good is relatively elastic d. 2  When the price elasticity of demand for a good is perfectly elastic (E d is â â), any increase in the price, no matter how small, will cause demand for the good to drop to zero. 3  Hence, when the price is raised, the total revenue falls to zero.
Elasticity of supply is measured as the ratio of proportionate change in the quantity supplied to the proportionate change in price. High elasticity indicates the supply is sensitive to changes in prices, low elasticity indicates little sensitivity to price changes, and no elasticity means no relationship with price.