Answer Happy

The Economist magazine offered the following two options for subscribing: 1. $56 per year for an online only subscription 2. $125 per year for print plus online access subscription A large majority of subscribers chose option 1. But the magazine would have preferred to sell more $125 subscriptions because it can charge higher rates to advertisers in the print magazine than it can online. The magazine decided to rely on insights from behavioral economics to try to increase the number of people choosing the $125 subscriptions. It began offering the following three options: 1. $56 per year for an online only subscription 2. $125 print plus online access subscription only 3. $125 print-only subscription A large majority of subscribers now chose option 2 rather than option 1. Source: Mukul Patki, "5 Behavioral Economics Principles Marketers Can't Afford to Ignore," Forbes, March 1, 2013. What insights from behavioral economics that were discussed in this chapter can help explain this result? ⒸA. Three options generally provide the optimal outcome when pricing choices. O B. Option 1 looked good compared to option 2; but when option 3 was offered, option 2 looked better. O C. Option 2 looked good compared to option 1; but when option 3 was offered, option 1 looked better. O D. Two options generally do not provide the optimal outcome when pricing choices.