Which Statement Accurately Explains Consumer Expectations

question 9

Multiple Choice

Which statement accurately explains consumer expectations?

• A) They expect things for free.
• B) They expect to buy what they need.
• C) Their expectations tend to decrease over time.
• D) Their expectations tend to increase over time.

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Definitions:

Oligopolists

Firms or entities within an oligopoly, a market structure characterized by a small number of large firms dominating the industry, which can influence prices and market outcomes.

Kinked-demand Model

An economic theory that predicts prices in certain competitive markets will remain stable despite economic pressures that would normally cause prices to fluctuate.

Allocative Efficiency

The state of resources being allocated in a way that maximizes the welfare or utility of consumers according to their preferences.

Productive Efficiency

A condition where an economy or firm produces goods or services at the lowest possible cost, utilizing resources in the best way possible.