One Psychological Bias That Can Lead to Faulty Judgments in Negotiation

question 8

Multiple Choice

One psychological bias that can lead to faulty judgments in negotiation is the ______ ,which refers to the fact that most people think others agree with them more than is actually the case.

• A)even-split ploy
• B)false consensus effect
• C)hindsight bias
• D)illusory correlation

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Definitions:

Price Elasticity

A metric that reflects the degree to which the demand for a product changes in response to alterations in its price, indicating consumer sensitivity to price fluctuations.

Marginal Cost

The cost of producing an additional unit of output, which is an important factor in economic decision making.

Profit-maximizing Price

The price that results in the maximum possible profit for a firm, based on its cost structure and demand for its products.

Elasticity of Demand

A gauge for understanding how price changes influence the consumer demand for a particular good.