Question

According to Ariely, why doesn’t the demand for an item increase when the item is offered for free?

Question

options:

Nobody wants what obviously isn’t in demand (and it must not be if it’s free).

In a market economy price is most often a signal of quality and free items are assumed to be of low quality.

At no cost, the item is understood to be a public good, and is consumed more conservatively.

As club goods, free items create artificial scarcity, which does not actually increase demand.

Diminishing marginal returns means that reducing prices below a certain point produces negligible increases in demand.

Social Science