A firm is more likely to adopt multiple brand names for the same product when the good is a non-durable
Indicate whether the statement is true or false
False. Non-durables are frequently purchased (such as bread). The consumer can try different brands over time to determine if any quality differences exist. In the case of durable goods (such as a car or household appliance), the consumer is stuck with her purchase for a period of time; there is less opportunity to compare her experiences with different brand names.
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The substitution effect occurs because when the price of one good increases, consumers will buy fewer substitute goods
a. True b. False Indicate whether the statement is true or false
________ purchasing power parity states that the difference between changes over time in product-price levels in two countries will be offset by the change in the exchange rate over this time.
A. Relative B. Full C. Absolute D. Partial