Consumer behavior, Microeconomics

Consumer Behavior

The description of how consumers allot their resources (income) to the purchase of various goods and services to get maximum in their well being.

There are three steps included in the study of consumer behavior.

             1) We will learn consumer preferences.

                     To explain how and why people select one good to the other.

            2) Then we will move to budget constraints.

                     People have restricted incomes.

            3) Then we will combine together consumer preferences and budget constraints to know about consumer choices.

                     What combination of goods will consumers purchase to maximize or enhance their satisfaction?

Consumer Preferences

Market Baskets

           A market basket is a group of one or more commodities.

                  One market basket can be preferred over the other market basket consisting a diverse combination of goods.

                  Three Basic Assumptions

1) Preferences are complete.

2) Preferences are transitive.

3) Consumers always select more of any good to less.

2025_Consumer preferences.png

Posted Date: 7/24/2012 9:12:57 AM | Location : United States







Related Discussions:- Consumer behavior, Assignment Help, Ask Question on Consumer behavior, Get Answer, Expert's Help, Consumer behavior Discussions

Write discussion on Consumer behavior
Your posts are moderated
Related Questions
During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of th

what is the theory of second best ? prove the theorem with the help of a diagram ?

You just opened a flower shop and are trying to understand pricing issues. You were told that elasticities are very important in determining prices and what products to supply, so

national income and what is used to measure it

What is What is Critical Temperature? Why Critical Temperature is Specified in Equation? Describe critical temperature specification...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Interest rate sensitivity can also be understood from another perspective.  The total cost of a commodity is not just its price, but also what must be paid to borrow money to purch


Analyze the sustainable approach to waste reduction developed by the company you selected. Include the following: Its products Previous methods of production The way it implemented

What is the difference between decreasing marginal returns and negative marginal returns?