Customers Are Usually More Willing to Pay More for the First

question 27

Multiple Choice

Customers are usually more willing to pay more for the first unit of a good they purchase than for the second, third, or subsequent units. This implies that

• A)typical consumers are irrational.
• B)firms are using non-linear price discrimination.
• C)firms are unable to determine their customers' reservation prices.
• D)typical consumers have a downward-sloping demand curve.

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Definitions:

Positive

Characterized by presence or possession; affirming an increase or addition in economics.

Explanation

A statement or account that makes something clear or understandable, often providing reasons for actions, decisions, or phenomena.

Normative Statement

A proposition that expresses a value judgment or opinion about what ought to be, rather than what is empirically verifiable.

Income Distribution

The way in which total income is shared among the population or different sectors of an economy.