Economic Assumptions Flashcards
Define the term Irrational
not based on clear thought of proof
Define Consumer Assumptions
Consumers Aim to maximize their benifits
Define Business Assumptions
Businesses aim to maximize their profits.
List some reasons for Consumer Assumptions.
- It’s hard to calculate the benefits of consuming a product
- They have buying habits that makes it difficult to make rational choices
- Consumers don’t have access to all information
Does all businesses aim to maximize their profits?
No, as some businesses like
- Charities
- Businesses that cares for quality
- Maximize the revenue (Increased market shares)
- Increase sales (Popularity)
What is a rational Consumer
It’s a consumer that makes decisions based on clear thoughts and reason
Are Consumer assumptions always true?
No, as some of them may have no particular reason
Would Fashion and trends affect the consumer assumptions?
Yes, as some consumers are influenced by others on Social media.
Why wouldn’t Charities aim to maximize their profits?
They Raise money to help the poor.
Why would Businesses like Lamborghini prefer quality over profits?
Some consumers Prefer quality over price.
