Impact on Consumer - Sales Maximisation [Virtual Learning Arcade]
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| | Consumer welfare will be dependent on the size of the individuals utility. Unfortunately, utility is very difficult to measure. A good proxy for an individual's utility is the size of their consumer surplus. If the consumer surplus is high for a good, then they will have spare income to spend on other goods. This would increase their utility. In other words, the lower the price, the higher the quantity, the better off the consumer. | |
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Submitted by bized on Wed, 14/03/2001 - 13:00