Consumer Behavior.docx - Pierre V Orcel MMG 515 Consumer Behavior 1 the consumer’s opportunity set with the “buy one get one free” deal and with a

Consumer Behavior.docx - Pierre V Orcel MMG 515 Consumer...

This preview shows page 1 - 2 out of 2 pages.

Pierre V. Orcel MMG 515 Consumer Behavior 1 ) the consumer’s opportunity set with the “buy one, get one free” deal and with a 50 percent discount. is as fallow. As the consumer has $200 to spend either on shoes(x) or on all other products (y) so in case of buy one, in order to get one free, the opportunity set consumer can buy 2 pair of shoes as the cost of each pair would be $100. This now equals to $200. But now the problem with this the scheme says buy one get one free, the consumer will finally own 3 pair of shoes as the limit of free pair of shoes per customer is only 1. Now while in case of 50% discount the cost of the shoe become $50 and consumer has $200 to spend which will benefit the consumer and now, he can purchase and own 4 pair of shoes of $50 each. In retrospect the customer has the fallowing options: Bundle A: Spending all the income on other goods, that means, $200 value of other goods. Bundle B: Spending all the income on shoes, that means 2 pair of shoes.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Winter '09
  • Kraig

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes