The Hidden Forces Behind Every Purchase: Understanding Consumer Choice

You're in a store and you see a great winter coat that costs $200. You know the jacket would keep you warm for several winters, but the price is high. If you buy the jacket, you won't have enough money to go on the road trip with your friends the following weekend.
You need to decide if getting the jacket to get ready for winter is more important than spending time with your friends and making memories. Which will it be? Consumer choice theory is all about how people decide what to buy. In this video, we'll talk about customer choice, the model's assumptions, and why it's important. You might even learn something about yourself and how you choose to spend your money. Let's find out together!
Consumer Choice Definition
In economics, a common meaning of consumer choice is one that tries to explain why people make the choices they do when they have to choose between two things. A trade-off is a choice that you give up if you choose something else. The theory of consumer choice tries to explain why people choose one good or experience over another, such as working over having fun or saving money over spending it.
Consumer choice looks at why people make the economic decisions they do when faced with trade-offs, restrictions, and changes in their environment that affect their ability to buy.
A trade-off is a choice you give up when you choose something else.
If you spend more money on one thing, you can't buy as much of something else. If you want more free time, you have to give up time you could use to work and make more money for the future. If a customer decides to spend more of their money now, they will have less money to spend in the future. If they get a raise at work, it will change how they spend their money.
Consumer choice is based on the idea that people will make smart choices to get what they want. People want to make decisions that are best for their budgets, their tastes, and how much pleasure they will get from them.
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Content Creator: 📝 Aysun Ibadova, Kamran Tagiyev
Voiceover author: 🎙️ Jeremy G.
Animation author: 🎨Nazanin Suleymanova
Sound editor: 🔊Aysun Ibadova
Project manager: 📊 Kamran Tagiyev

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