Question

Think of shopping at a grocery store. Describe how the model of consumer choice would explain your decision-making process while shopping at a grocery store. You must use the concepts of budget constraint, marginal utility, and marginal utility per dollar in your description. Feel free to choose products you might buy at the grocery store and create marginal utilities over the quantities of these products (if you wish to get detailed).

1-3 paragraph answers, please, and don't copy from other Chegg answers. thank you so much!

Answer 1

There are a number of different models that describe the process or steps consumers engage in as they prepare to make a purchase,often depicted as a sales funnel.

The present study demonstrates that purchasing decisions resulted from a cognitiveprocess involving an integrated consideration of the participants’ own individualcontexts and cues within the store environment. The extent to which these constructsfactored into this process varied between individuals as well as within an individuals’behaviour throughout the store environment. Through merging perspectives in theretailing and consumer behaviour literature, the present research has contributedto building a more comprehensive understanding of the constructs contributing to purchasing decisions within the store environment. Further research which begins to segment patterns of behaviour and explore broader elements of individual contexts would be a valuable progression from the current work

.To understand how a household will make its choices from a grocery store, economists look at what consumers can afford, as shown in a BUDGET CONSTRAINTS line, and the total utility or satisfaction derived from those choices. In a budget constraint line, the quantity of one good is measured on the HORIZONTAL axis and the quantity of the other good is measured on the VERTICAL  axis. The budget constraint line shows the various combinations of two goods that are affordable given consumer income

Consider the situation of a consumer who likes to buy fruits and vegetables .The quantity of fruits shows in the horizontal and vegetables in the vertical axises.Consumer faces a budget constraint of $56 to spend.The price of fruits is $14 and the price of vegetables  is $7. The points on the budget constraint line show the combinations of fruits and vegetables that are affordable.

the combination that will provide consumer with the greatest utility, which is the term economists use to describe a person’s level of satisfaction or happiness with his or her choices.

MARGINAL UTILITY, which is the additional utility provided by one additional unit of consumption. This equation for marginal utility is:

MU=   CHANGE IN THE TOTAL

Change in quantity

Notice that marginal utility diminishes as additional units are consumed, which means that each subsequent unit of a good.

MARGINAL UTILITY PER DOLLAR,   is the amount of additional utility consumer receives given the price.

Marginal utility per dollar= marginal utility /price

Consumer will continue to purchase the good which gives him the highest marginal utility per dollar until he exhausts the budget.

The marginal utility-price ratio indicates the satisfaction derived from the last dollar spent on a good. A consumer maximizes utility be equating the marginal utility-price ratio for each good purchased and consumed