Price Sensitive

Price Sensitive

The state in which a security's or product's price changes dramatically in the face of increased or decreased demand. Price sensitivity generally refers to securities with comparatively few shares outstanding; a large order to buy or sell is likely to affect the price more strongly than a similar order for a company with more shares outstanding. In other products, price sensitivity largely comes from whether a given product is considered a necessity or a luxury. A "luxury" product is likely to be more sensitive.