In a survey of consumers, Daniel Kahneman, Jack Knetsch and Richard Thaler asked their opinion of a hardware store's decision to
A)go out of business because a larger hardware store opened in the same city; 82 percent of those surveyed believed it was unfair for the larger store to compete with the smaller store.
B)raise the price of snow shovels the day following a snowstorm; 82 percent of those surveyed believed this was unfair.
C)sell tickets to sporting and cultural events at prices higher than prices paid at the ticket windows for the same events; 82 percent of those surveyed believed this was unfair.
D)remain in business even though the store was not making an economic profit; 82 percent of those surveyed believed it would be unfair for the store to go out of business if there were no other hardware stores in the same area.

Question

Quizplus · Accepted Answer

The survey results suggest that consumers perceive the decision to raise prices immediately after a snowstorm as unfair, despite the basic economic principle of supply and demand. This is likely due to the perception that the hardware store is taking advantage of the situation and profiting at the expense of consumers who are in urgent need of snow shovels.

In a Survey of Consumers, Daniel Kahneman, Jack Knetsch and Richard