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S E8: The Law of Demand - How You Choose to Buy

Think Like An Economist

CHAPTER

The Interdependence Principle

You can start to think about it by considering what happens to your demand for tea if the price of coffee falls so low that you actually buy a cup. Experiment in this way, and you'll end up acting as if you're following the rational rule for buyers. If buying more makes your life better, you'll stick with it. That's because the marginal benefit outweighed price of an extra cup. And don't forget to take account of your next best alternative.

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