Prospect theory implies that consumers are motivated by
A)The actual price level
B)The distance of the price from the reference price
C)All of the above
D)None of the above

Question

​Prospect theory implies that consumers are motivated by
A)​The actual price level
B)The distance of the price from the reference price
C)All of the above
D)​None of the above

Quizplus · Accepted Answer

Prospect theory suggests that consumers are primarily motivated by the difference between the actual price and their reference price. This means that if the actual price is perceived as being far from the reference price, it will have a greater impact on the consumer's decision-making process. Hence, option B (distance from the reference price) is the correct choice. Option A (actual price level) and option C (all of the above) are not completely accurate, as prospect theory emphasizes the importance of the reference price, rather than the absolute level of the price. Option D (none of the above) is not correct, as prospect theory is a widely accepted model in behavioral economics.

​Prospect Theory Implies That Consumers Are Motivated by

Prospect Theory Implies That Consumers Are Motivated by