Economic assumptions

Question 1

Assumptions

Answer 1

Consumers aim to maximise their benefits

Question 2

Assumption 2

Answer 2

Businesses aim to maximise their profit

Question 3

Reasons why consumers may not maximise profits?

Answer 3

It is hard to calculate benefits, consumers have habits that are hard to give up, consumers copy other behaviour.

Question 4

Reasons why producers may not maximise profit?

Answer 4

Producers may have managers that revenue maximise by maximising sales. (Salaries can be linked to commission), producers may be prioritising care for customers (added costs for customer care training), producers may be completing charitable work to raise awareness for a particular cause.

Question 5

Producers may have managers that revenue maximise by maximising sales. (Salaries can be linked to commission), producers may be prioritising care for customers (added costs for customer care training), producers may be completing charitable work to raise awareness for a particular cause.

Answer 5

Reasons why producers may not maximise profit

Question 6

What is the underlying assumption for consumers in economics

Answer 6

Consumers aim to maximise benefit