Mike has an annual income of $1 million. Fernanda has an annual income of $100,000. Their buying behaviors differ because of their ability to buy, called their ___, which is largely determined by income. a. buying power b. income power c. discretionary power. d. organization power

The correct answer is:

buying power (a.)

Explanation:

A consumer's buying power is the ability of a consumer to make a purchase. The higher the real income of a consumer, the greater the buying power of that individual. In this example, Mike with an annual income of $1 million has a purchasing power that is ten times greater than Fernanda's annual income of $100,000, this means that Mike is ten times more likely to pay for a product than Fernanda.

Inflation can also affect the buying power of an individual if the income remains the same and the price of the product or service increases.

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