Question

Suppose that 24% of the students in the first group answered yes and that 73% of the students in the second group answered yes. It is likely that more students in the second group were willing to pay $75 for the pair of jeans because they were told the normal price was much higher. This is an example of a ________ effect in decision-making.

Answer 1

Answer:

Price Discrimination OR Law of Demand; according to the complete question.

Step-by-step explanation:

24% of the students in the first group answered yes.

73% of the students in the second group answered yes.

More students in the second group were willing to pay $75 for the pair of jeans BECAUSE they were told that the normal price was much higher.

From this information, I guess that the first group was told (by the jeans vendor probably) that the $75 was higher than the normal price of the jeans. This will be the reason why a lesser percentage of students in Group A are willing to purchase the pair of jeans.

This is an example of PRICE DISCRIMINATION effect on decision making. Price discrimination is used in product marketing.

The same pair of jeans in Situation A cost higher than the normal price while in Situation B it cost lower than the normal price. Even though the figure given is static at $75 in both cases, the data that follows in the question tells it as 2 different prices; one favourable to the buyers and another not so favourable to the buyers.

The LAW OF DEMAND also applies here. The higher the price, the lesser the quantity demanded (by a group of students) and the lower the price, the higher the quantity demanded.