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      Question

      When customers perceive little difference between

      competing banks, price sensitivity tends to:
      A Decrease Correct Answer Incorrect Answer
      B Increase Correct Answer Incorrect Answer
      C Remain unchanged Correct Answer Incorrect Answer
      D Disappear Correct Answer Incorrect Answer
      E Become irrelevant Correct Answer Incorrect Answer

      Solution

      When differentiation is low, customers compare primarily on price. Why Other Options Are Incorrect тАв A: Opposite effect. тАв C: Market dynamics change. тАв D, E: Unrealistic. Banking Example: Comparing identical savings interest rates.

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