Economists usually assume that people act in a rational, self-interested way. in explaining how consumers make choices this means that economists believea) consumers will always buy goods and services at the lowest possible prices. b) consumers spend their incomes to order to accumulate the most goods and services. c) consumers make choices that will leave them as satisfied as possible given their incomes, tastes, and the prices of goods and services available to them. d) consumers will spend their incomes and time on activities that benefit themselves as much as possible, without regard to the welfare of others.

Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. define the variable x to represent total marketing effort. a typical model that is used to predict demand as a function of total marketing effort is based on the power function: d = axb suppose that a is a positive number. different model forms result from varying the constant b. sketch the graphs of this model for b = 0, b = 1, 0< b< 1, b< 0, and b> 1. (we encourage you to use excel to do this.) what does each model tell you about the relationship between demand and marketing effort? what assumptions are implied? are they reasonable? how would you go about selecting the appropriate model?