agec

• Consumption


  The overall spending on consumer goods by individuals, groups, and even nations in a particular time frame
• Consumer behavior


  The way the consumers would behave
• Theory of consumer behavior


  A series of assumptions about how people choose to spend their money
• Theory of consumer behavior

  The idea that consumers make their choices based on their incomes, the prices of the goods, and their preferences
• Factors that affect consumer behavior

  • Wealth
  • Income
  • Prices
• Wealth effect


  Rich people have an abundance of things in their houses
• Utility


  The total satisfaction received from consuming goods or service
• Types of utility

  • Ordinal utility
  • Cardinal utility
• Ordinal utility


  The satisfaction a consumer obtains after consuming various products cannot be measured but can be arranged in order of preference
• Cardinal utility


  The satisfaction consumer acquires after consuming any good or service can be measured and expressed in quantity
• Total utility


  Increases with quantity
• Law of diminishing marginal utility


  The marginal utility of the goods or services decreases as the quantity of the good or services increases ceteris paribus
• Indifference set/schedule


  A combination of goods for which the consumer is indifferent
• Indifference curve


  Graphical expression of the indifference set/schedule, showing different combinations of two goods that yield the same utility (level of satisfaction) to the consumer

  
• Indifference map


  A set of indifference curves called

  
• Market


  Any institution, mechanism, or situation that brings or joins together the buyer and sellers of a particular product
• Market


  Describes a place or digital space by which goods, services, and ideas are exchanged to satisfy consumer need
• Types of market


  • Digital market
  • Physical market
• Digital market


  The marketing of products or services using digital technologies, mainly on the internet but also including mobile phones, display advertising, and any other digital media
• Physical market


  A setup where buyers can physically meet their sellers and purchase the desired merchandise from them in exchange for money
• Four market structures


  • Perfectly competitive market
  • Monopoly market
  • Oligopoly market
  • Monopolistically competitive market

  
• Perfectly competitive market


  • Homogeneous products
  • Large number of buyers and sellers that do not affect price
  • Free entry and exit of goods and services to and from the market
  • Demand and supply work freely
  • Perfect information or knowledge of market participants
• Monopoly market


  • There is only one seller in the market
  • Firm faces the market demand and has relative demand and has relative freedom over the price it charges
  • It is difficult to enter the monopolistic market (blocked entry)
• Oligopoly market


  • There is a small number of firms that control the market
  • None of these firms can keep the other(s) from having significant influence over the market
• Types of oligopoly market

  • Pure oligopoly
  • Differentiated oligopoly

  
• Pure oligopoly


  Oligopolistic market situation in which firms sell homogeneous or identical products
• Differentiated oligopoly


  Market situation in which oligopolistic firms sell differentiated products
• Monopolistically competitive market


  • Market situation where there are numerous buyers and sellers of a differentiated product
  • Blend of competition and monopoly