Suppose that after an increase in price, a consumer chooses not to purchase the good because she perceives that the price increase is fundamentally unfair. How does the traditional theory of consumer behavior treat this situation?

Question

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The traditional theory of consumer behavior assumes that individuals make rational choices based on their preferences and budget constraints. It does not consider how ethical or moral considerations may influence consumer behavior. Therefore, the theory does not account for situations where a consumer chooses not to purchase a good based on a perceived unfair price increase.

Suppose That After an Increase in Price, a Consumer Chooses