When Consumers Cannot Judge the Quality of a Product Because

question 39

True/False

When consumers cannot judge the quality of a product because they lack information or skill,they are likely to perceive a higher- priced product as having higher quality.

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Definitions:

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Elastic

A term often used in economics to describe a situation where the demand for a product or service significantly changes in response to a change in price.

Pricing Strategy

An approach businesses use to set the prices for their products or services, based on costs, market demand, competition, and other factors.

Marginal Revenue

The change in total revenue that results from selling one additional unit of product.