For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices. As a result, lowering prices may lead to reduced sales for the makers of luxury goods. How is this counterintuitive concept rationalized by analysis of consumer behavior and the utility maximization rule

Answers

Answer 1

Answer:

The explanation of that situation is below.

Explanation:

To begin with, the most important factor to have in mind in the situation explained above is the fact that we are talking about a "luxury good" and therefore that when it comes to this type of goods is better when the majority of the people do not possess or at least they must represent the fact that they are exclusive for only some part of the population. That is why that those goods use the strategy of increase always the price because that will means that they are not affordable for the majority of the society but only for a few and that will give to the owner of the good a sense of uniqueness and with that it also comes the sense of superiority. That is why that when it comes to this type of good the analysis change and it collides with the other theory of utility maximation.


Related Questions

Westbank Real Estate, Inc. owns 10 acres of forested land. Westbank wants the land cleared in order to build houses. Westbank emails a signed electronic memorandum to a representative of Hardell Lumber Co. offering to sell the mature trees and rich topsoil to Hardell for lumber and agricultural purposes. The electronic memorandum includes the parties' typed names, the consideration, the price, and a description of the property, lumber, and soil. Hardell replies via email to Westbank that it accepts Westbank's terms, electronically signs the memorandum, and will start removing the trees and soil next month. Before Hardell can begin clearing the land, Westbank changes its mind, wants to keep the land forested, and prevents Hardell from accessing the property claiming no contract has been formed.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PREFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the e-mails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an e-mail in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statue of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.

Answers

Answer:

Westbank Real Estate, Inc. and Hardell Lumber Co.

2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)

3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PERFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)

4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.

5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)

6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.

7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)

8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)

9. Who signed the emails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)

10. What type of signature must be on an email in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)

11. Does the electronic memorandum have the parties' typed names? (YES/ NO)

12. Does the electronic memorandum describe the property involved?(YES/ NO)

13. Is it likely a court would find that the electronic memorandum satisfied the statute of frauds? (YES/ NO)

14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.

Explanation:

The memoranda exchanged between Westbank Real Estate and Hardell Lumber Co provides the evidence of their oral contract. The statute of fraud covers most oral contracts, especially those involving real property or sale of land.  It is important to note that land includes all its permanent attachments.

The specific The specific identification inventory costing method: Select one: A. Measures the ending inventory at the actual prices of the specific units sold during the period B. Is more appropriate for a firm selling construction equipment than for a firm selling greeting cards C. Is not a generally accepted method of pricing inventories D. Uses expected future acquisition costs rather than historical costs to measure the ending inventoryinventory costing method:

Answers

Answer:

A. Measures the ending inventory at the actual prices of the specific units sold during the period

Explanation:

The Specific identification inventory costing method is a strategy of getting the actual ending inventory cost. To get this cost requires the deliberate manual calculation of each of the remaining commodities brought on certain dates, at year-end inventory. The number gotten is then multiplied by their actual cost of purchase date. The result is then taken as the ending inventory cost.

Consequently, the purpose is to allocates the specific cost of each inventory item to cost of goods sold.

Hence, in this case, the correct answer is option A. Measures the ending inventory at the actual prices of the specific units sold during the period.

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