When the Price of a Gallon of Milk Increases by $0.50

question 52

Multiple Choice

When the price of a gallon of milk increases by $0.50, consumers notice this increase immediately. This is an example of what concept in the understanding of consumer price sensitivity.

• A) Customers often miss the just noticeable difference.
• B) Customers are less sensitive to disposable products.
• C) Customers are most sensitive to products that are bought frequently.
• D) Customers are most sensitive to food products.
• E) Customers are most sensitive to grocery products.

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Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning no one can be effectively excluded from its use, and someone's use of it does not reduce its availability to others.

Airplane Seats

The seating arrangement within an aircraft, determining passenger capacity and comfort levels.

Rival in Consumption

A property of a good whereby one person's consumption of the good reduces the ability of another person to consume it.

Excludable

A characteristic of a good or service that allows owners or providers to prevent others from using it without paying.