Price sensitivity analysis is a market research technique used to measure how sensitive customers are to changes in product pricing. It helps businesses understand how price adjustments affect consumer behavior, purchasing decisions, and overall demand for a product or service. By conducting price sensitivity analysis, companies can determine the optimal pricing strategy that maximizes revenue and profitability while considering factors such as competition, consumer preferences, and market dynamics. This analysis is valuable in setting prices that strike a balance between attracting customers and generating sufficient profit margins.