A Small Business Owner Must Understand What the Customer Values

question 42

True/False

A small business owner must understand what the customer values and how much money the customer is willing to pay to obtain the firm's product or service.

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Definitions:

Preferences

The individual choices or subjective evaluations consumers make regarding the satisfaction they expect from consuming goods or services.

Opportunity Cost

Missing out on potential gains from other choices upon selecting one option.

Leisure

Free time when an individual is not engaged in work or essential activities, often used for relaxation, hobbies, or cultural and artistic pursuits.

Income Effect

Refers to the change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.