Consumers are definitely sensitive to prices. In the US in the couple years before the financial crisis gasoline prices spiked to above $4/gallon. This had a dr

Consumers are definitely sensitive to prices. In the US in the couple years before the financial crisis gasoline prices spiked to above $4/gallon. This had a dramatic effect on buying habits, with a marked shift to more fuel efficient vehicles. And it hurt SUV happy US automakers to the advantage of more fuel efficient foreign companies. In Europe, gas prices are 2 to 3 times what they are in the US. As a result, cars are dramatically smaller and more fuel efficient. Transportation patterns are dramatically different, with many fewer miles driven per person. It's Econ 101 that people adjust their spending in response to price changes. It varies exactly how they do so for different products, this is known as elasticity.