What Are the Three Levels of Consumer Decision Making? Briefly

question 28

Essay

What are the three levels of consumer decision making? Briefly define each.

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Definitions:

Inelastic Demand

Product or resource demand for which the price elasticity of demand is less than 1, so that any given percentage change in price leads to a smaller percentage change in quantity demanded. As a result, quantity demanded is relatively insensitive to (inelastic with respect to) price.

Financial Aid

Financial support provided to individuals to help cover the costs of education or other personal expenses.

Price Elastic

Describes how sensitive the demand for a good is to changes in its price; highly elastic demand means consumers will significantly reduce buying with small price increases.

Price Inelastic

Describes a situation where the demand for a good is not very responsive to price changes, meaning consumers buy roughly the same amount regardless of price fluctuations.