Final answer:
A dollar earned in sales revenue is viewed differently than a dollar saved in purchasing due to the reference points and perceived value.
Behavioral economists emphasize the role of percentages over absolute savings, while the concept of marginal utility per dollar helps to assess the satisfaction received per dollar spent.
Step-by-step explanation:
How an extra dollar of sales revenue compares to a dollar saved by purchasing is a concept that involves understanding value from different perspectives. Mainstream economists argue that a dollar is a dollar regardless of how it is earned or saved.
However, behavioral economists suggest that most people evaluate financial outcomes relative to a reference point, such as the cost of a product, and consider gains and losses in terms of percentages rather than actual savings.
This approach is akin to the concept of marginal utility per dollar, which measures the amount of additional satisfaction (or utility) received from each dollar spent.
In practical terms, a dollar saved on purchasing may often be perceived as more valuable than an extra dollar of sales revenue because it directly affects the buyer's reference point and perceived percentages of saving, though in absolute terms, both are equivalent.
A sensible economizer would only pay more for an item if the marginal comparison shows that the item provides proportionally more utility, essentially focusing on satisfaction per dollar spent.