Psychological Reactance Theory May Help Explain Why

question 30

Multiple Choice

Psychological reactance theory may help explain why

• A) underage drinkers are more likely to report having been drunk in the past year than are legal-age drinkers.
• B) a toddler, ignoring a toy, protests and demands that toy back when a playmate begins to play with it.
• C) the demand for and value placed on an object is greater when the object is perceived to be rare or hard to get.
• D) All of the choices are correct.

---

Definitions:

Herfindahl-Hirschman Index

An index used to assess the concentration of market power to determine the degree of competition in a sector.

Squared Market Shares

A measure used in economics to assess the level of market concentration by squaring the market share percentages of each firm within the industry and then summing them.

Concentration

The degree of market power held by a few companies within an industry, often measured using indices like the HHI.

Economies of Scale

The reduction in per-unit cost as the volume of production increases, due to factors like specialization and bulk purchasing.