Firms Are Better Off Using Rebates Rather Than Just Lowering

question 110

Multiple Choice

Firms are better off using rebates rather than just lowering the price of a good because

• A)people view the firm in a positive light because now poorer people will be able to afford their good.
• B)customers overestimate the value of the rebate and so buy more of the good, making profits higher than if they just lowered the price.
• C)only those who place a low value on their time or are price sensitive actually redeem the rebate, making profits higher than if they just lowered the price.
• D)lowering the price is inefficient and creates additional deadweight loss.

---

Definitions:

Regional Culture

The distinctive set of social norms, practices, attitudes, and values that characterize a geographical area or community.

Beliefs And Values

Fundamental convictions or principles that individuals hold to be true, which shape their attitudes, behaviors, and perceptions, and influence decision-making processes.

Political Candidates

Individuals who are nominated or declare their interest in running for a political office.

Generation X

A demographic group referring to people born approximately between the early-to-mid 1960s and the early 1980s, characterized by their experiences during the rise of mass media and digital technology.