Your textbook costs $100 and the college snack shop sells ice cream for $1. Which of the following statements is true for most people?

Question

Quizplus · Accepted Answer

Most people perceive the value of a free item, like an ice cream, as higher relative to its cost than a small percentage discount on a more expensive item, like a textbook. This is due to the psychological principle of diminishing marginal utility and the immediate tangible benefit of the free item.

Your Textbook Costs $100 and the College Snack Shop Sells