microsoft charges a price of $599 for a copy of windows 7. is this pricing decision rational?\na. we cannot…

microsoft charges a price of $599 for a copy of windows 7. is this pricing decision rational?\na. we cannot assume that this pricing decision was rational because we do not have enough information to make an assumption.\nb. microsofts choice cannot be rational: the price is clearly more than most people are willing and able to pay.\nc. when we assume the managers at microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.\nd. microsofts choice was rational: the price will maximize profit.

microsoft charges a price of $599 for a copy of windows 7. is this pricing decision rational?\na. we cannot assume that this pricing decision was rational because we do not have enough information to make an assumption.\nb. microsofts choice cannot be rational: the price is clearly more than most people are willing and able to pay.\nc. when we assume the managers at microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.\nd. microsofts choice was rational: the price will maximize profit.

Answer

Brief Explanations:

In economics, rational decision - making implies that decision - makers use all available information and weigh benefits and costs. Without more information, we cannot say for sure if a decision is rational or not. Option A is too definitive without considering the rational - decision - making concept. Option B makes an unfounded claim about what people are willing and able to pay without data. Option D assumes the price will maximize profit without evidence. Option C correctly applies the concept of rational decision - making in a business context.

Answer:

C. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.