Consumer Preferences
The cardinal approach of utility uses an imaginary measure of satisfaction, utils. In the ordinal approach, consumer preferences refer to the ranking a consumer makes between different product bundles or baskets. A market basket is a collection of products a consumer can purchase. Two goods are taken in a basket to explain consumer preferences. For example, a market basket could have coffee and sandwiches.
Assumptions about Consumer Preferences
The following assumptions are made:
Completeness
It means that consumers can compare and rank all possible combinations of products, known as baskets. A consumer can definitively state their preference for any two baskets, say A and B. They might prefer basket A over B, B over A, or view them as equally desirable.
Monotonic Preferences or More is Better
It means that consumers prefer more of any good to less. For instance, if a consumer is comparing baskets of goods, under the monotonic preferences assumption, they would always prefer the basket with more quantity.
Du chapitre 5:
Now Playing
Consumer Behavior
121 Vues
Consumer Behavior
205 Vues
Consumer Behavior
225 Vues
Consumer Behavior
423 Vues
Consumer Behavior
125 Vues
Consumer Behavior
139 Vues
Consumer Behavior
81 Vues
Consumer Behavior
88 Vues
Consumer Behavior
311 Vues
Consumer Behavior
99 Vues
Consumer Behavior
156 Vues
Consumer Behavior
55 Vues
Consumer Behavior
36 Vues
Consumer Behavior
51 Vues
Consumer Behavior
41 Vues
See More