When Consumers Are Unable to Judge the Quality of a Product

question 16

Multiple Choice

When consumers are unable to judge the quality of a product through examination or prior experience, they usually do which of the following?

• A) Make a price-quality inference.
• B) Depend on an internal reference price.
• C) Assess the fair price.
• D) Experience an assimilation effect.
• E) Experience a price-placebo effect.

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Definitions:

Bargaining Power

The capacity of one party in a negotiation to influence the terms in their favor due to their position or resources.

Strike Activity

Refers to the actions taken by workers, typically organized by labor unions, to cease work in order to protest for better wages, working conditions, or other labor-related issues.

Permanent Strike Replacements

Workers hired to permanently take the positions of striking workers, a tactic sometimes used by employers during labor disputes.

Lockout

An action taken by employers to prevent employees from entering the workplace, typically during a labor dispute to pressurize the labor side.