An External Information Search Is Especially Important When

question 185

Multiple Choice

An external information search is especially important when:

• A) there is a great deal of past experience
• B) there is a high risk of making an incorrect decision
• C) the cost of gathering information is high
• D) buying frequently purchased,low-cost items
• E) there is little risk of making an incorrect decision

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Definitions:

Elasticities

Indicators that show the sensitivity of the demand or supply of a product to variations in its price, income levels, or other relevant elements.

Elasticity of Demand

A measure of how much the quantity demanded of a good or service changes in response to a change in its price.

Determinant

A factor or element that causes change in an outcome or condition, often used in reference to variables that affect economic indicators.

Cross Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good.