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What Is a Decision-Making Heuristic? Describe Three Typical Heuristics Used

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Essay

What is a decision-making heuristic? Describe three typical heuristics used in consumer decision-making situations.


Definitions:

Marginal Cost

The change in the total expense associated with the production of an extra unit of a product, whether it be an increase or decrease.

Average Total Cost

The total cost of production divided by the number of goods produced, representing the average cost per unit of output.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced, representing the per-unit production cost.

Marginal Cost

The monetary cost of generating one additional unit of a product or service.

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