Question

Give two examples of situations in which prices gave you an incentive to purchase or not purchase a good or service.

Answer 1

Answer:

Prices play an important role in the decision making of an individual. It gives us information about the relative scarcity of the good and helps us decide if we want to purchase the good or not. Two examples can be,

a). When you buy a good in a sale. Sales give you an opportunity to buy what you wanted to at a price that is lower than usual.

b). When the price of Coke increases, you start consuming more Pepsi as they both are substitute goods. So, you would want to buy the cheaper one and not purchase the relatively expensive one.