Which of the following observations concerning reference prices is true?
A)The reference price is the company's cost to produce the product.
B)Reference prices are set by regulators.
C)Demand may increase if a firm's price is lower than a customer's reference price.
D)All customers have the same reference prices for the same basic type of purchase.

Question

Quizplus · Accepted Answer

If a firm's price is lower than a customer's reference price,customers may view the product as a better value and demand may increase.

Which of the Following Observations Concerning Reference Prices Is True