Suppose that last week you visited Dunkin Donuts for a large coffee on your way to campus. The cashier explained that if you go to the link printed on your receipt and answer the survey, you can receive a free donut. Does everyone who receives a link on their receipt get the free donut? No, because some customers will be unwilling to overcome the hurdle. fluctuating prices quantity discount bundling haggling alternative versions and timing extra hassle, bad service, and imperfect goods
The Correct Answer and Explanation is:
The correct answer is: No, because some customers will be unwilling to overcome the hurdle.
Explanation:
In this case, the “hurdle” refers to the extra effort required to get the free donut, which is filling out a survey online. This is an example of what economists call a “hurdle model,” where customers face a certain level of inconvenience or effort to obtain a reward, and not everyone will be willing to make that extra effort.
The free donut is offered as a reward for completing the survey, but the inconvenience of having to go online, answer questions, and spend time on the survey may deter some customers. While some will take the time to complete the survey and claim their donut, others may not see the effort as worth the reward, and therefore, they won’t follow through.
In terms of economic concepts, this can be linked to the idea of “extra hassle,” where customers are asked to deal with additional steps to get something they want, which creates friction. If the reward (free donut) is not perceived as valuable enough to justify the time and effort involved, the hurdle prevents some people from redeeming it.
This model is also linked to concepts like bundling (where you offer a product or service together with another), alternative versions (offering different incentives), and even imperfect goods (the idea that the free donut might not appeal to everyone due to personal preferences).
Thus, the concept here is that not everyone will follow through on receiving the free donut because the additional effort (the “hurdle”) is a deterrent for some customers.
