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.
Price elasticity tells how much of an impact a change in price will have on the consumers' willingness to buy that item. If the price rises, the law of demand states that the quantity demanded of that item will decrease. Price elasticity of demand tells you how much the quantity demanded decreases. Elastic demand means that the consumers of that good or service are highly sensitive to changes in price. Usually, a good which is not a necessity or has numerous substitutes has elastic demand.