Reference no: EM132707854

The management of Delicare, a laundry detergent designed specifically for delicate fabrics, decided to test the market's responsiveness to price changes by hiring a market research firm to carry out an artificial-sales experiment. The market research firm intercepted 650 women in shopping malls and brought them to a nearby test room. In the room, they constructed a store shelf with Delicare and a variety of other laundry products on it and gave each woman $10 to buy one of these products. She was allowed to keep the change. For one third of the women, the Delicare was priced at $3.79 per bottle, which is a typical actual retail price for this item. For another third of the women, the Delicare was priced at $3.29 per bottle. For the final third of the women, the Delicare was priced at $4.29 per bottle.

Problem 1: Describe two factors that would be likely to cause the price responsiveness observed in this experiment to differ from that which would be observed in the market. For each factor, give and justify your view as to whether it would make the price responsiveness appear greater than or less than that which would actually occur in the market.