Which of the Following Statements Is True of Prospect Theory

Multiple Choice

Which of the following statements is true of prospect theory?

A) Consumers are not risk-averse.
B) Consumers are willing to buy a product even when the decision involves losses.
C) When an item is exchanged, sellers ask for a much lower price than expected by the buyers.
D) As part of their defense mechanism, sellers respond to self-threat by diminishing the value of a self-associated object.
E) Consumers have strong negative reactions to price increases.