Final answer:
Marketers favor expiring coupons due to frequently unclaimed redemptions. Pricing affects consumer perception of quality, impacting equilibrium price and quantity in markets with imperfect information.
Step-by-step explanation:
Marketers prefer to use expiring coupons because customers often fail to redeem them. This marketing strategy can be understood in the context of consumer behavior and market dynamics.
For instance, when a used car dealer lowers prices due to a surplus of inventory, customers may perceive the lower prices as an indication of poor quality, despite the reduction being a move to increase sales volume. This is an example of how market price can be interpreted by consumers and affect their purchasing decisions.
In contrast, if a dealer raises the prices of the cars, it could lead to an assumption that the quality of the vehicles is higher, which may ironically increase the number of customers interested in purchasing. This scenario demonstrates how price perceptions can impact the equilibrium price and quantity in a market where information is imperfect, and consumers do not always behave rationally.