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What Is Anchoring Bias

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Essay

What is anchoring bias?


Definitions:

Equilibrium

A balance between market demand and supply that results in steady prices.

Budget Line

A budget line represents all combinations of goods and services that a consumer may purchase given current prices and income levels.

Marginal Rate of Substitution

How quickly a person agrees to trade one product for a different one to preserve their overall happiness.

Satisfaction Maximized

The point at which an individual achieves the highest level of satisfaction or utility from the consumption of goods or services.

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