Students Were Amazed When Professor Diaz Walked into Class on the First

question 135

Multiple Choice

Students were amazed when Professor Diaz walked into class on the first day of the semester and correctly "sensed" that two people in his class of 23 were born on the same day. The tendency to think that it is very unlikely that two people in a class of 23 could share the same birthday is an example of the:

• A)belief-bias effect.
• B)confirmation bias.
• C)fallacy of positive instances.
• D)overestimation effect.

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Definitions:

Penetration Pricing

A pricing strategy where the price of a product is initially set low to rapidly reach a wide fraction of the market and stimulate growth.

Price Sensitivity

The degree to which the price of a product affects consumers' buying behaviors or the demand for the product.

Substitution Risk

The potential loss or decrease in market share due to consumers opting for alternative products or services.

Cross Subsidy

A pricing strategy where the revenue or profits from one product or service are used to support another within the same company, often to gain competitive advantage.