The Observation That Consumers Are Generally More Sensitive to Price

question 112

Multiple Choice

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

• A) most consumers cannot remember what price they paid the last time they bought a particular product.
• B) it is easier to lose customers with a price increase than to gain customers with a price decrease.
• C) most consumers would rather skip buying a product than pay a higher price.
• D) most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes.
• E) firms gain more customers with price decreases than they lose with price increases.

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Definitions:

Limited Partner

An investor in a partnership who has limited liability to the extent of their investment and does not take part in the day-to-day management of the business.

Letterhead

The heading at the top of a sheet of letter paper, usually consisting of a name and an address, and often a logo.

Limited Partner

An investor in a partnership who is not directly involved in its daily operations and whose liability is limited to the amount invested.

Capital Contribution

Funds or assets provided by owners or shareholders to increase a company's equity.