Because Consumers Often Use Price as an Indicator of Product

question 239

Multiple Choice

Because consumers often use price as an indicator of product quality, what decision factor becomes important in this situation?

• A)perceived quality
• B)product benefits
• C)convenience
• D)brand name of the product
• E)maintained price

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive.

Trade

The exchange of goods, services, or both between two or more parties, either within a country or between countries.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service relative to what they actually pay.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, reflecting the producer's benefit.