You started an online business two weeks ago. Thus far, you have averaged ten sales a day, which is one sale for every five hits. You are now considering giving up your day job and becoming a full-time online retailer. You have calculated the amount of income you can earn based on ten sales a day and know that level of income would support you in a comfortable fashion. The belief that you will have ten sales per day if this becomes your full-time occupation is based on which one of the following?
A) Mental accounting
B) Anchoring and adjustment
C) Law of small numbers
D) Bubble and crash theory
E) Confirmation bias

Question

Quizplus · Accepted Answer

The belief that selling ten items per day will continue into the future is based on the Law of Small Numbers, which is the tendency to assume that a small sample is representative of a much larger population. To assume that ten sales per day will continue indefinitely is an optimistic assumption that does not account for potential fluctuations, changes in the market, or competition. Therefore, this decision should be based on a more thorough analysis and not solely on this small amount of data.

You Started an Online Business Two Weeks Ago