When a Monopolist Decreases the Price of Its Good, Consumers

question 171

Multiple Choice

When a monopolist decreases the price of its good, consumers:

• A) buy the same amount of the good as before.
• B) buy more.
• C) buy less.
• D) may buy more or less, depending on the price elasticity of demand.

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Definitions:

Sensitization

The process in which a repeated exposure to a stimulus results in an increased response to that stimulus over time.

Habituation

The process of becoming accustomed to a stimulus after repeated exposure, leading to a decrease in responsiveness.

Habituation

The act of an organism diminishing or ending its responses to a repeated stimulus through time.

Reward

A stimulus or event that follows a behavior and increases the likelihood of that behavior occurring again.