The observation that consumers are generally more sensitive to price increases than to price decreases suggests that
A) most consumers cannot remember what price they paid the last time they bought a particular product.
B) it is easier to lose customers with a price increase than to gain customers with a price decrease.
C) most consumers would rather skip buying a product than pay a higher price.
D) most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes.
E) firms gain more customers with price decreases than they lose with price increases.

Question

Quizplus · Accepted Answer

The observation implies that customers are more likely to switch to a competitor or forego a purchase altogether in response to a price increase, suggesting that losing customers with a price increase is easier than gaining customers with a price decrease.

The Observation That Consumers Are Generally More Sensitive to Price