Two bottles of body wash sit side-by-side in a grocery store: Olay (a brand name) sells for $6.00, while Up and Up (not a brand name) sells for $3.00. Even defenders of brand names would have to admit that
A)no rational consumer would spend twice as much for Olay as she would for Up and Up.
B)the side-by-side presence of these two body washes conveys no useful information to consumers.
C)Olay has no incentive to maintain the quality of its product just because of the Olay brand name.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The presence of both products allows consumers to make informed choices based on price and perceived quality. Brand names often maintain quality to justify higher prices, and rational consumers may choose Olay for reasons beyond price, such as perceived quality or brand loyalty.

Two Bottles of Body Wash Sit Side-By-Side in a Grocery