Most Retail Outlets Tell Customers an Item's Original Price, in Addition

question 41

Multiple Choice

Most retail outlets tell customers an item's original price, in addition to the sale price, to get customers to believe they are getting a good price. Retail managers are using which of the following heuristics?

• A) The availability bias.
• B) The representativeness heuristic.
• C) The anchoring and adjustment heuristic.
• D) All answers are correct.

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Definitions:

Tax Considerations

The factors concerning the tax implications of any financial decision, investment strategy, or transaction, which can affect the overall benefit or cost to an individual or business.

Risk Tolerance

An individual's or financial entity's capacity to endure loss or volatility in investment value while attempting to achieve investing goals.

Weighted Average Cost

A calculation that takes into account the various costs of goods based on their relative weights, to arrive at an average cost per unit.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits that could have been received but were sacrificed in the pursuit of another option.