According to Simon's Theory of Bounded Rationality, People Tend to Use

question 183

Multiple Choice

According to Simon's theory of bounded rationality, people tend to use

• A)simple strategies in decision making that focus on only a few facets of available options and often result in irrational decisions that are less than optimal.
• B)complex strategies in decision making that focus on multiple facets of available options and often result in irrational decisions that are less than optimal.
• C)simple strategies in decision making that focus on multiple facets of available options and often result in rational decisions that are optimal.
• D)complex strategies in decision making that do not focus clearly on enough facets of available options and often result in irrational decisions that are less than optimal.

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Definitions:

Specific Firm

Refers to a particular company or business entity distinct from others in its industry or sector.

Demand Curve Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating its sensitivity.

Brand Loyalty

A consumer's preference to buy a particular brand's product over alternatives consistently.

Monopolistic Competition

A market structure in which many firms sell products that are similar but not identical, allowing for significant control over pricing and some degree of market power.