Consumers will make a decision to purchase a new product only if it
A) has a lower marginal utility per dollar spent than another product.
B) is recommended as a valuable product by other consumers.
C) increases the total utility they obtain from their limited income.
D) can be sold at a lower price than that for a competing product.

Question

Quizplus · Accepted Answer

Consumers make the decision to purchase a new product based on how much total utility they can obtain from their limited income. If the new product provides more total utility for the same price or less than a similar product, then it is more likely to be purchased. Marginal utility per dollar spent and price are also important considerations, but they are not the sole factors that determine a consumer's decision to purchase a product. Recommendations by other consumers may influence a consumer's decision, but they are not a necessary condition for purchasing a new product.

Consumers Will Make a Decision to Purchase a New Product