When Inflation Causes Relative-Price Variability Consumer Decisions

question 45

Multiple Choice

When inflation causes relative-price variability consumer decisions,

• A)are distorted and the ability of markets to efficiently allocate factors of production is impaired.
• B)are distorted, but markets are still able to efficiently allocate factors of production.
• C)are not distorted, but the ability of markets to efficiently allocate factors of production is impaired.
• D)are not distorted and markets are still able to efficiently allocate factors of production.

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Definitions:

True Objections

Genuine concerns or hesitations expressed by a potential buyer that need to be addressed by the seller.

Quantity Discount

A pricing strategy where the price per unit of a product decreases as the quantity of the product purchased increases.

Cumulative

Pertaining to an increasing total achieved by progressively adding successive amounts or elements together over time.

Buying Cycle

The process that customers go through, including awareness, consideration, and decision, before making a purchase.