Consumers Often Infer the Existence of Underlying Attributes, Such as Quality

question 103

True/False

Consumers often infer the existence of underlying attributes, such as quality, through perceptual attributes, such as price.

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Definitions:

Cross-price Elasticity

Measures the responsiveness of the demand for one good to a change in the price of another good.

Good Y

Typically, a variable used in economic models to represent a generic good or service in the market.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.

Inferior Good

is a type of good whose demand decreases when the income of consumers increases, contrary to what is observed with normal goods.