Related to the Economics in Practice on p. 129: Suppose Store ABC runs an ad claiming to have "low prices everyday." They even demonstrate that the total expenditure for a basket of groceries is less at their store than at any of their competitors. Which of the following statements is not true?
A) You would clearly be better off shopping at Store ABC.
B) Your preferences may not be consistent with the basket used by Store ABC (in their example), thus it is not clear whether or not you would be better off shopping at Store ABC or not.
C) Even if your preferences are generally consistent with the basket used by Store ABC, it may still be possible for you to substitute other similar goods for those in the basket used by Store ABC (in their example) and thus spend less at another store.
D) All of the above statements are true.

Question

Quizplus · Accepted Answer

Statement A is not necessarily true because it assumes that every consumer would benefit from shopping at Store ABC based on a single comparison of a specific basket of goods, ignoring individual preferences and the possibility of finding better deals on different items or at different stores.

Related to the Economics in Practice on P