By Using Consumer Choice Theory,explain Why Diamonds,which Are Not Necessary

question 31

Essay

By using consumer choice theory,explain why diamonds,which are not necessary to sustain life,are expensive,whereas water,which is necessary for life,is not.

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Definitions:

Operating Costs

Expenses related to the operation of a business, excluding costs associated with producing goods directly.

Income Statement

A report detailing a business's earnings, expenditures, and profit during a certain timeframe.

Indirect Labor

Labor costs of employees who assist in the production process but do not directly work on the production of goods or services.

Factory Overhead

Factory overhead refers to the indirect costs associated with manufacturing, including utilities, maintenance, and management salaries.