Loss aversion occurs when
A) The consumer's valuation of an outcome is less sensitive, per dollar, to small losses than to small gains
B) The consumer's valuation of an outcome is more sensitive, per dollar, to small losses than to small gains
C) The consumer's valuation of an outcome is less sensitive, per dollar, to large losses than to small gains
D) Suppliers are inelastic to price changes

Question

Quizplus · Accepted Answer

Loss aversion refers to the tendency for people to be more sensitive to losses than to gains. Thus, option B is the correct answer.

Loss Aversion Occurs When