Which of the Following Are Examples of Erosion

question 7

Multiple Choice

Which of the following are examples of erosion?
I.the loss of sales due to increased competition in the product market
II.the loss of sales because your chief competitor just opened a store across the street from your store
III.the loss of sales due to a new product which you recently introduced
IV.the loss of sales due to a new product recently introduced by your competitor

• A)III only
• B)III and IV only
• C)I, III and IV only
• D)II and IV only
• E)I, II, III, and IV

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Definitions:

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.

Limited Knowledge

The state of having restricted information or understanding about a subject or situation, emphasizing incomplete or finite expertise.

Behavioral Economists

Behavioral economists study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical economics.

Endowment Effect

The phenomenon where people ascribe more value to things merely because they own them, often leading to a discrepancy between buying and selling prices.