Final answer:
The statement is true, "Consumers don't buy if they don't understand what they're being charged for," is true because consumers are less likely to make a purchase when they do not fully understand the charges and the value they will receive in return.
Step-by-step explanation:
The statement, "Consumers don't buy if they don't understand what they're being charged for," is true. When consumers do not fully understand what they are being charged for, they are less likely to make a purchase. This is because they may feel uncertain or skeptical about the value they will receive in return for their money. However, when consumers have a clear understanding of the charges and can see the benefits or value they will get in return, they are more likely to make a purchase.
The Federal Trade Commission (FTC) monitors advertising to ensure that factual claims about a product’s performance are verified to some extent. While exaggeration and ambiguity may be present in marketing, outright falsehoods are prohibited. This aligns with the concept of Caveat emptor, which means 'let the buyer beware.'For example, if a consumer is considering buying a smartphone data plan but does not understand the charges or the benefits of having a data plan, they may hesitate to make the purchase. However, if they have a clear understanding of what the charges cover, such as access to high-speed internet, streaming services, and online communication, they are more likely to see the value and make the purchase.