Question

Explain the influence of opportunity cost on consumers' decisions

Answer 1

Explanation:

When individuals produce goods or services, they normally trade (exchange) most of them to obtain other more desired goods or services. ... When consumers purchase one good or service, they are giving up the chance to purchase another. The best single alternative not chosen is their opportunity cost.

Answer 2

Answer:

Individuals who consider their opportunity costs are more sensitive to the value of their future alternatives than those who do not consider their opportunity costs, so opportunity cost con- sideration leads to a lower likelihood of purchase when future alternatives are appealing, but a higher likelihood of purchase.