The real value of a product or service is the value of other products or services you could buy with the same money. Opportunity cost is the best alternative we give up when we make a choice.Continue reading “Opportunity cost”
Households choose products and services based on
- The prices of the products/services as well as prices of substitutes and compliments.
- The household income and accumulated wealth
- Tastes and preferences
- Household’s expectations about the future.