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Buying A Fantastic Brand Cleaner

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Yahya Bello Extra Credit 2 Page 133 Econ 1020 Professor Leach 1. Consumers who buy fantastic brand cleaner instead of Pathmark premium All-purpose cleaner behavior would be considered as bounded rationality because they tend to make their choices that serve their objectives, but they have limited ability to acquire and process information. Consumers that buy fantastic brand cleaner can also be considered as bounded rationality because they believe in the rule of thumbs that says the higher the price of goods the higher quality of the goods will be. Since the price of Fantastik brand cleaner is higher than that of Pathmark, they apply the rule of thumbs before making a choice between the two brands. 2. Based on my own prior experience as a shopper, I can definitely agree that the rule of thumb is rarely valid with a genuine evidence from my personal experience as a shopper e.g. there was a time I bought a pair of jeans from one of my favorite stores at a very low price without considering the quality of the jeans and a friend of mine also bought the same pair of jeans from a different store at a higher price believing in the rule of thumb( the higher the price the higher the quality of the item). Unfortunately, my friend’s pair of jeans completely fades out and the zip also worn out while mine that I got from a very low price without applying the rule of thumbs still looks good and well kept. The situation suggests that all item with a higher price are of good quality,

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