Final answer:
Higher prices and impressive tangibles lead to increased customer expectations of quality, reflecting the psychological association between price and perceived value.
Step-by-step explanation:
When customers face higher prices and are exposed to more impressive tangibles, they typically develop higher expectations regarding the quality of the service or product they are purchasing. In economic terms, the relationship between price and perceived quality is part of the subject of consumer behavior, which is deeply rooted in the concept of perceived value. This perception is often influenced by a common psychological assumption that a higher price signifies better quality or more luxurious service.
In the context of the examples provided, if the price of an item such as a gemstone, luxury clothing, or legal services increases, it is a common expectation that the product or service provides a heightened level of satisfaction or performance. This belief is based on the idea that higher prices equate to higher quality, which can shape a buyer's demand for the product. Similarly, when income levels rise, consumers tend to consume more of what are known as normal goods, which also supports the notion that people expect more from their purchases as they spend more.