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A firm selling televisions knows from marketing research that when consumers in developing countries reach on average a yearly income equivalent to $1,000 they are more likely to purchase one of their televisions. Such a low income is sometimes enough because

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sebastiansierraocm

Answer:

That low income can be enough because of either one of these two reasons (or the two at the sime time):

  • A high proportion of subsidized good for low-income earners in developing countries: a consumer making $1,000 per year on average could benefit from subsidized food, housing, healthcare, and even transportation, allowing this person to devote most of his income to other expenses.
  • Cheap credit available: this same person could not have enough money to pay for the television in cash, but could easily obtain a credit with low interest rates, and long-term payments.

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