Consider the Following Statements

question 216

Multiple Choice

Consider the following statements:
a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
c. Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?

• A) a only
• B) b only
• C) c only
• D) a and b
• E) a, b, and c

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Definitions:

Early Adopter

An individual or organization that uses or purchases new products, technologies, or services before the majority of the market, often influencing trends and standards.

Diffusion Curve

A graphical representation showing the rate and pattern of adoption of a new product, technology, or idea over time among members of a social system.

Maturity Phase

A stage in the product life cycle where sales growth stabilizes, and the product is well established in the market, facing increased competition.

Market Segments

The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.