In their surveys of consumers, Daniel Kahneman, Jack Knetsch and Richard Thaler found that
A)most people considered it unfair for firms to raise their prices because of an increase in their costs, but fair to raise their prices after an increase in demand.
B)most people considered any increase in price to be unfair as it led to an increase in profits.
C)most people believed that low-income people were hurt most by increases in prices.
D)most people considered an increase in price by firms following an increase in their costs to be fair but believed it was unfair for firms to raise their prices because of an increase in demand.

Question

Quizplus · Accepted Answer

According to the surveys conducted by Kahneman, Knetsch and Thaler, most people considered it fair for firms to raise their prices after an increase in their costs, but unfair to raise prices due to an increase in demand. This indicates that people tend to associate price increases with changes in the firm's costs rather than changes in demand.

In Their Surveys of Consumers, Daniel Kahneman, Jack Knetsch and Richard