Observation for effects on purchasing powers of a customer due to discount
Answers
It largely depends on the type of product you are considering, whether it’s a luxury good, staple good, convenience goods, unsought goods(insurance), etc. Discounts generally trigger the purchase of luxury goods like a wrist watch or perfumes than the goods which are a necessity. The main reason attributable to this trend is that consumer conceives luxury products more like a hobby than goods. They want to own it but are reluctant to buy it, and that’s where discount comes into action.
What is purchasing power? Purchasing power is nothing but the price of products and services that can be purchased with a unit of currency. Purchasing power is vital as a result of, all else being equal; inflation decreases the number of products or services you’d be ready to purchase.