Assumptions of Psychological Law of Consumption

1. Normal Conditions

The first condition of this law is that it only applies during stable conditions, i.e., this law does not uphold during the time of war, recession, expansion, political issues, strikes, natural disasters, and more.

2. Constant Psychological and Institutional Complex

Once again, this law only applies when the psychological and institutional complex remains the same. Here, the psychological and institutional complex refers to aspects like population, preferences, habits, fashion, and more.

3. Capitalist Economy

This is self-explanatory, as, within a capitalist economy, people are free to choose between products and can purchase whatever goods and services are required. Whereas, in a communist economy, the state is constantly interfering with the production and supply of products and services. Also, the competition is eliminated, resulting in people only buying what is available.