When the Price of an Item Increases, Buyers Tend to Purchase

question 91

Multiple Choice

When the price of an item increases, buyers tend to purchase less of that item:

• A)solely because of the substitution effect.
• B)solely because of the income effect.
• C)because of both the substitution and the income effects.
• D)only if the substitution effect and the income effect do not cancel out each other.

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Definitions:

Optimal Distinctiveness Theory

A social psychology theory suggesting individuals seek to balance their need for uniqueness with their desire for belonging.

Need for Control

An individual's desire or requirement for autonomy and influence over their environment or situation.

Autonomy

The capacity to make an informed, uncoerced decision; often associated with self-governance and independence.

Individualistic Societies

Societies that emphasize personal achievements, individual rights, and autonomy, as opposed to collective goals.