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Chapter 3: Problem 1

In this chapter, consumer preferences for various commodities did not change during the analysis. In some situations, however, preferences do change as consumption occurs. Discuss why and how preferences might change over time with consumption of these two commodities: a. cigarettes. b. dinner for the first time at a restaurant with a special cuisine.

Short Answer

Expert verified
Preferences might change over time with the consumption of cigarettes due to physiological reasons and habit formation, leading to increased consumption. In case of dining at a new cuisine restaurant, preferences may change based on the novelty factor, quality of food, service and the customer's personal palate, which may either increase or decrease the preference for the restaurant over time.

Step by step solution

01

Analyze changes in preference for cigarettes over time

Initially, consumers may start smoking cigarettes due to social pressures, cultural norms, or experimentation. Over time, habit formation and addiction can occur, which significantly changes preferences. Addiction creates a cycle of increased tolerance, leading to a need for higher consumption to derive the same satisfaction. So, with the consumption of cigarettes, preference changes take place due to the physiological impact of nicotine and the habit formation associated with smoking.
02

Analyze changes in preference for the dining experience

For a first-time dining experience at a restaurant serving a special cuisine, curiosity, novelty, and the desire for an exotic or unique experience may drive the initial preference. However, as the consumption occurs (in this case, eating the meal), preferences may shift based on the quality of the food, service, ambiance, and the personal palate of the consumer. If the experience surpasses expectations, preference for the restaurant and its cuisine may increase. Otherwise, it may diminish. Over time and with more experiences, the preference might stabilize based on a more informed perception of value.
03

Summarize key takeaways

It's important to understand that consumer preferences are not static. They change over time with the continued consumption of a product or experience. The evolution of preferences occurs due to a variety of factors, such as physiological responses (as seen with cigarettes), or sensory evaluation and experience (as with the dining experience).

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Most popular questions from this chapter

Debra usually buys a soft drink when she goes to a movie theater, where she has a choice of three sizes: the 8 -ounce drink costs \(\$ 1.50\), the 12 -ounce drink \(\$ 2.00\) and the 16 -ounce drink \(\$ 2.25 .\) Describe the budget constraint that Debra faces when deciding how many ounces of the drink to purchase. (Assume that Debra can costlessly dispose of any of the soft drink that she does not want.

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