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 is the strength of the relationship between price levels and consumer demand. A product is highly elastic if consumer demand varies considerably with price. For these products, an increase in price is likely to cause a substantial downward change in the quantity of demand. The prices of inelastic products, by contrast, do not vary considerably with price. For inelastic products, either increases or decreases in price are unlikely to change the quantity of consumer demand.