In Which of the Following Does a Customer Respond to the Technical

question 69

Multiple Choice

In which of the following does a customer respond to the technical quality of a service?

• A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks.
• B) Kathy tries out a new restaurant every week because she likes to experience the variety.
• C) Bill has gone to the same chiropractor for the past fifteen years because he is friendly and takes the time to listen to Bill.
• D) Ray avoids going to the bank as far as possible because the manager is rude and unhelpful.
• E) Alex has no interest in theater, but goes often because her best friend loves plays.

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Definitions:

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum possible price for each unit consumed that the buyer is willing to pay, capturing all available consumer surplus.

Large Firms

Companies that are significantly larger than the average for their industry, often having considerable influence over market conditions and prices.

Demand Curve

A graphical representation that shows the inverse relationship between the price of a good or service and the quantity demanded by consumers.

Perfect Competitor

An entity in a highly competitive market where firms sell homogeneous products, have no control over market price, and where there is free entry and exit of firms.