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Understanding Influencers of Buying Behavior and Demand Dynamics

This chapter explores key concepts that impact consumer buying behavior, including substitution and income effects, as well as the determinants of demand. It delves into the influences on purchasing decisions such as product quality, pricing, and seller reputation. Additionally, it clarifies the principles of the "Law of Demand," unitary elasticity, and the relationship between demand elasticity and revenue. The chapter aims to enhance understanding of how these factors interplay to shape market behavior and consumer choices.

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Understanding Influencers of Buying Behavior and Demand Dynamics

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  1. REVIEW Chapter 4

  2. Which of these is generally NOT considered to be an influencer of our buying behavior? • Substitution effect • Income effect • Consumption effect

  3. What is the greatest influence on our buying behavior? • Quality of the product • Price of the product • Seller of the product

  4. Which of these does NOT explain the “Law of Demand”? • Price increase = Demand decrease • Price increase = Demand increase • Price decrease = Demand increase

  5. What is the total amount of money a firm makes for selling its goods called? • profit • revenue • resources

  6. Which of these is NOT a component of DEMAND? • Afford the good/service • Agreement on the price of good/service • Need the good/service • Desire the good/service

  7. Which of these represents “unitary elasticity”? • PEoD > 1 • PEoD < 1 • PEoD = 1

  8. Which of these is NOT true of revenue and elasticityof demand? • Elasticity of demand can increase the revenue • Elasticity of demand can reduce the revenue • Inelasticity of demand can increase the revenue

  9. A demand schedule lists the quantities demanded at each price by all consumers in the market • True • False

  10. Buying less of a good when the price rises shows the customer is inelastic to the price increase. • True • False

  11. [Enter question here] • This graph shows a shift increase in demand • This graph shows a shift decrease in demand

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