Final answer:
Price is a key aspect of a brand's image and can act as a signal of quality to buyers. However, this belief can be influenced by imperfect information. Price plays a significant role in shaping a brand's image and consumer perceptions.
Step-by-step explanation:
Price is a key aspect of a brand's image because it often acts as a signal of quality to buyers. Buyers may assume that a higher price indicates higher quality, even if they are not experts on the product. For example, a buyer may assume that an expensive restaurant must have good food or that a lawyer who charges more per hour is better.
However, this belief can be influenced by imperfect information and may not always hold true. In some cases, a higher price may deter buyers who perceive it as too expensive, or a lower price may be associated with low quality.
Overall, price can play a significant role in shaping a brand's image and influencing consumer perceptions of quality.