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Many retailers advertise price-matching policies, such as, “In the unlikely event that you find an identical item that you purchased here offered at a lower price in another store, we promise to refund the difference.” Contrary to what might logically be expected, a recent study finds that the presence of such a policy leads to a decrease in consumer searches when search costs are low (e.g., when multiple competitor stores are clustered in a small area), but an increase in consumer searches when search costs are high. These findings can be explained if a store’s price-matching policies __________.
Which of the following most logically completes the passage?
  • a)
    affect consumer search behavior only when information about prices in other stores is unavailable
  • b)
    encourage consumers to shop around when there are multiple competitor stores nearby
  • c)
    force nearby competitor stores to reduce their prices in order to retain a market share
  • d)
    are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify them
  • e)
    lead to significant increases in consumer searches only for high-price purchases
Correct answer is option 'D'. Can you explain this answer?
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Many retailers advertise price-matching policies, such as, “In t...
To complete the passage, we need to find an option that explains the findings mentioned in the passage. The passage states that the presence of price-matching policies leads to a decrease in consumer searches when search costs are low but an increase in consumer searches when search costs are high. We need to find an explanation for this behavior.
Let's analyze each option:
(A) affect consumer search behavior only when information about prices in other stores is unavailable.
  • This option suggests that price-matching policies only affect consumer search behavior when price information in other stores is not available. However, the passage doesn't mention anything about the availability of price information.
(B) encourage consumers to shop around when there are multiple competitor stores nearby.
  • This option aligns with the findings mentioned in the passage. When multiple competitor stores are clustered in a small area, low search costs make it easier for consumers to compare prices. Therefore, price-matching policies would encourage consumers to shop around. This is a plausible explanation for the decrease in consumer searches when search costs are low.
(C) force nearby competitor stores to reduce their prices in order to retain a market share.
  • This option suggests that the presence of price-matching policies forces competitor stores to lower their prices. While this may be a potential outcome of price-matching policies, it doesn't directly explain the decrease in consumer searches when search costs are low or the increase in consumer searches when search costs are high.
(D) are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify them.
  • This option provides a logical explanation for the findings in the passage. When search costs are low and consumers can easily verify the prices at other stores, they consider price-matching policies as credible indicators of low prices. This leads to a decrease in consumer searches because they trust that the store already offers the lowest price. Conversely, when search costs are high, consumers are more likely to verify the prices, and price-matching policies become a signal for them to search for better deals.
(E) lead to significant increases in consumer searches only for high-price purchases.
  • This option suggests that price-matching policies only lead to increased consumer searches for high-price purchases. However, the passage doesn't provide any information supporting this specific claim.
Based on the explanations above, option (D) is the most logical completion of the passage. It provides a plausible explanation for the observed behavior and aligns with the findings mentioned in the passage.
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Many retailers advertise price-matching policies, such as, “In the unlikely event that you find an identical item that you purchased here offered at a lower price in another store, we promise to refund the difference.” Contrary to what might logically be expected, a recent study finds that the presence of such a policy leads to a decrease in consumer searches when search costs are low (e.g., when multiple competitor stores are clustered in a small area), but an increase in consumer searches when search costs are high. These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. Can you explain this answer?
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Many retailers advertise price-matching policies, such as, “In the unlikely event that you find an identical item that you purchased here offered at a lower price in another store, we promise to refund the difference.” Contrary to what might logically be expected, a recent study finds that the presence of such a policy leads to a decrease in consumer searches when search costs are low (e.g., when multiple competitor stores are clustered in a small area), but an increase in consumer searches when search costs are high. These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Many retailers advertise price-matching policies, such as, “In the unlikely event that you find an identical item that you purchased here offered at a lower price in another store, we promise to refund the difference.” Contrary to what might logically be expected, a recent study finds that the presence of such a policy leads to a decrease in consumer searches when search costs are low (e.g., when multiple competitor stores are clustered in a small area), but an increase in consumer searches when search costs are high. These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Many retailers advertise price-matching policies, such as, “In the unlikely event that you find an identical item that you purchased here offered at a lower price in another store, we promise to refund the difference.” Contrary to what might logically be expected, a recent study finds that the presence of such a policy leads to a decrease in consumer searches when search costs are low (e.g., when multiple competitor stores are clustered in a small area), but an increase in consumer searches when search costs are high. These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. Can you explain this answer?.
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These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. 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These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. 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These findings can be explained if a store’s price-matching policies __________.Which of the following most logically completes the passage?a)affect consumer search behavior only when information about prices in other stores is unavailableb)encourage consumers to shop around when there are multiple competitor stores nearbyc)force nearby competitor stores to reduce their prices in order to retain a market shared)are taken as credible indicators of low prices at the store when and only when it is easy for consumers to verify theme)lead to significant increases in consumer searches only for high-price purchasesCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice GMAT tests.
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