When Consumers Face Ambiguity of Information and It Is Hard

question 43

Multiple Choice

When consumers face ambiguity of information and it is hard to determine product quality, they:

• A) tend to see the product as inconsistent with their prior expectations.
• B) easily understand that the marketer is trying to be deceptive about the product.
• C) tend to easily approve the information by experiencing the product.
• D) tend to support hypotheses of the product derived from advertising or word of mouth.
• E) find attribute recall for the product very easy and long lasting.

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Definitions:

Marginal Revenue Function

The rate at which total revenue changes with respect to the output quantity change.

Marginal Costs

The added cost that comes from producing an additional unit of a product or service.

Kinked Demand Model

An economic model that suggests prices remain stable because firms in oligopoly markets may not adjust their prices in response to small shifts in demand or cost.

Demand Curve Shifts

Changes in the demand curve caused by factors other than the price of the good, leading to a new quantity demanded at every price.