Thus the profit maximization model predicts something about the effect of taxation on output, namely that output decreases with increased taxation. If the predictions of the model fail, we conclude that the profit maximization hypothesis was false; this should lead to alternate theories of the firm, for example based on bounded rationality. Borrowing a notion apparently first used in economics by Paul Samuelsonthis model of taxation and the predicted dependency of output on the tax rate, illustrates an operationally meaningful theorem; that is one requiring some economically meaningful assumption that is falsifiable under certain conditions.
Thus, its focus is often on economic needs such as economy of purchase or use, convenience, efficiency in operation or use, dependability in use, or improvement in earnings. Students are likely to give a wide variety of examples of purchases--both those that seem to be consistent with the economic buyer model and those that are not.
The amount of information that the consumer had or decided to get is a factor that typically differentiates the different types of purchases. As these differences are brought out, it may be useful to discuss the idea that consumers are more willing to search for information and compare products i.
On the other hand, many purchases are made more or less habitually--especially once a satisfactory alternative has been found.
For such purchases, most consumers see the cost of searching for more information as too high relative to its potential value. Some students may realize that "economic buyer" comparisons are usually easier to make when the alternative ways of meeting a need are comparable.
For example, it may be easier to compare different brands of 13" color television sets than to decide whether to buy a new TV set or alternatively to spend the money on a ski weekend. Both may involve entertainment needs, but really represent very different alternatives. Sometimes it is not easy to do economic comparisons even when alternatives are, on the surface, more similar.
For example, a student who is interested in buying a large screen TV would need to decide if the extra money for a HDTV model, or perhaps a thin LCD model, was worth the difference in price.
For example, a purchase of a particular CD may be based on the emotional reaction to a particular song--or a specific artist. On the other hand, when the same basic products brands are available at different stores, consumers may search for the "best deal" on the desired product.
This question can also provide the basis for some forward integration--setting the stage for the consumer product classes developed and explained in detail in Chapter 9.From an economic perspective, needs would be viewed as a consumer maximizing their dollar or buying potential by choosing the product that best meets their requirements based on value, features, functionality, convenience etc.
Economic needs relate to the economic-buyer model of consumer behavior by consumers comparing similar products and weighing their buying options to ensure that .
The circular flow of economic activity is a model showing the basic economic relationships within a market economy.
It illustrates the balance between injections and leakages in our economy. In behavioural economics, it has been used to model the strategies agents choose when interacting with if the seller has more relevant information than the buyer but no effects where the initial increase in demand from the policy percolates through the economy and generates additional economic activity.
The effects of fiscal. Economic-Buyer Model Activity From an economic perspective, needs would be viewed as a consumer maximizing their dollar or buying potential by choosing the product that best meets their requirements based on value, features, functionality, convenience etc.
Economic needs relate to the economic-buyer model of consumer behavior by consumers. The Economic Buyer in B2B Customer Development.
The economic buyer — through a form of veto over purchases — acts as gatekeeper of the budget. He, or she, might be the CFO, the CEO or any kind of manager controlling a sizeable budget. Remember, a market is just a place where buyers and sellers come together to generate economic activity.
Goods and Services Markets In goods and services markets, households buy finished products from firms that are looking to sell what they make.