Consumers Usually Like Price Increases Because These Changes Signal That

question 50

True/False

Consumers usually like price increases because these changes signal that an item is "hot" and represents a good value.

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Definitions:

Diminishing Marginal Utility

The principle that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.

Loss Averse

The tendency of individuals to prefer avoiding losses to acquiring equivalent gains, a fundamental behavior observed in economic and financial decision-making.

Framing Effect

A cognitive bias in which the way information is presented affects decision-making or judgments, leading individuals to alter their interpretation based on the "frame" of reference.

Identical Situations

Circumstances or scenarios where all relevant factors and conditions are exactly the same for all parties involved.