Can an increase in the price of cheese induce customers to buy it more

The number of customers who buy cheese will significantly reduce for some customers will choose to forego the commodity. The utility of cheese will significantly reduce as a result of the increase in the prices (Bertrand & Morse, 2016). Conversely, there are other competitor goods such pasta which can be substituted and used in the place of cheese. With this fact in mind, it is very realistic to argue that the increase in the prices of cheese will result to a reduction in the number of consumers who purchase it since there are substitutes which are better off with respect to their prices in the market. On the other hand, if the target market of the goods (in this case cheese) consists of high-income individuals, an increase in the prices of cheese will increase the confidence of the consumer.

One party is usually the sender of the information, and it is upon the party to determine whether to send the information and how to send it. The recipient of the information (the other party) chooses the way of interpretation of the signal (Hörner, 2008). An example of the application of signaling is the instance of potential employees who are aspiring to get a certain job sends an application to an employer detailing their ability, and the employer interprets the information received, and a decision follows. Screening This is one of the workable strategies of tackling unfavorable selections and options. Its main difference from signaling is there is a selection or sieving of the good agents from the bad agents. ; Palgrave Macmillan: Basingstoke, UK.