A Research Project by Pallak and His Associates Demonstrated the Effectiveness

question 4

Multiple Choice

A research project by Pallak and his associates demonstrated the effectiveness of the low- ball compliance technique often used by car dealers. In the Pallak work, Iowa homeowners were promised newspaper publicity if they conserved energy, which led to energy savings initially. A month later they were told that they would not get the publicity after all. What happened?

• A) Canceling the publicity had no effect, they continued to save energy at the same rate as they did after first being told about the publicity.
• B) Canceling the publicity caused them to revert to their old energy consumption levels.
• C) Canceling the publicity resulted in even greater energy savings.
• D) Only a and b.
• E) Only a and c.

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Definitions:

Fizzle & Sizzle

An informal term indicating the contrasting outcomes of events or products; "fizzle" for failing and "sizzle" for succeeding amazingly.

Implicit Cost

The opportunity cost associated with a firm's use of resources that it already owns, representing the income the firm foregoes by using these resources in its current capacity.

Total Revenue

The total amount of money received by a company from sales of its products or services, before any expenses are subtracted.

Linear

Pertaining to a relationship or equation that can be graphically represented in a straight line, indicating a constant rate of change.