Which of the Following Statements Concerning "Reference Prices" Is FALSE

question 151

Multiple Choice

Which of the following statements concerning "reference prices" is FALSE?

• A) A reference price is the price consumers expect to pay for an item.
• B) Retailers sometimes want consumers to use the manufacturer's list price as the reference price even though their actual retail selling price is lower.
• C) Different customers may have different reference prices for the same type of purchase.
• D) Leader pricing is normally used with products for which consumers do not have a specific reference price.
• E) None of these statements about "reference prices" is FALSE.

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Definitions:

Good Y

A term used in economics to represent a generic second good, often used in theoretical models comparing two different goods.

Budget Constraint

The restrictions on the sets of goods and services a consumer can purchase, determined by their income and the cost of these items.

Nachos

A Mexican dish consisting of heated tortilla chips covered with melted cheese and often also served with a variety of toppings.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance that is the main constituent of Earth's streams, lakes, and oceans, and the fluids of most living organisms.