Question

Which of the following factors affects consumers' decisions to buy goods or services: Production costs O Competition O Labor costs O Buying power​

Answer 1

Buying power​

Step-by-step explanation:

Buying power also known as purchasing power can be defined as the amount of goods and services that a consumer can buy based on the value of his or her currency (money).

This ultimately implies that, the ability of an individual customer to buy an amount of goods and services is solely dependent on his or her buying (purchasing) power.

For example, if the price of a brand new automobile is $10,000 and a consumer has $9,500; he won't be able to buy the automobile due to his low buying power. However, he can use that amount of money to buy another product or service.

Hence, buying power​ is a factor that affects consumers' decisions to buy goods or services.

Additionally, economists use the consumer price index (CPI) to measure the buying (purchasing) power of consumers. The consumer price index is a measure used by economists to analyze and examine the weighted aggregate of prices of a basket of goods and services paid for by consumers, these are medical, food, and transportation.