Income plays a big role in how people behave as consumers and what they choose to buy. Here’s a simpler breakdown:
Buying Power: When people have a higher income, they can purchase more things. For example, a family earning more money can buy organic foods, while a family with a tighter budget might buy regular grocery items.
Getting the Most Value: People try to get the best satisfaction, or utility, from what they buy based on how much money they have. They spread their income across different products to get the most happiness from their purchases.
Changing Demand: When income goes up, people tend to buy more normal goods, like luxury items. At the same time, they might buy fewer inferior goods, like instant noodles.
In short, how much money a person makes directly influences what they buy and how happy they feel with their choices.
Income plays a big role in how people behave as consumers and what they choose to buy. Here’s a simpler breakdown:
Buying Power: When people have a higher income, they can purchase more things. For example, a family earning more money can buy organic foods, while a family with a tighter budget might buy regular grocery items.
Getting the Most Value: People try to get the best satisfaction, or utility, from what they buy based on how much money they have. They spread their income across different products to get the most happiness from their purchases.
Changing Demand: When income goes up, people tend to buy more normal goods, like luxury items. At the same time, they might buy fewer inferior goods, like instant noodles.
In short, how much money a person makes directly influences what they buy and how happy they feel with their choices.