Theory of consumer behavior, Microeconomics

THEORY OF CONSUMER BEHAVIOR:

It is generally observed that market aggregate demand curve for a commodity is downward sloping, given other things. Our problem is to investigate economic rationality behind this for a commodity of all individual consumers. The market demand basically depends on the characteristics of demand for a commodity by individual consumers, and the demand for a commodity of an individual consumer depends upon the behaviour of the consumer. Clearly, to  investigate economic rationality behind the law of demand, we shall start with the analysis of consumer behaviour.  

There are different approaches to analyse the consumer behaviour. But in all approaches, it is assumed that the consumer is rational. This means that the consumer's objective is to maximise her utility by choosing one commodity bundle from among all the commodity bundles (money income and the prices of the commodities are given to the consumer).   

Posted Date: 10/26/2012 2:07:50 AM | Location : United States







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

Write discussion on Theory of consumer behavior
Your posts are moderated
Related Questions


what is fixed and variable inputs with more explanation

Write a 1-2 page summary on markey failure

in the keynesian model the price is assumed to be what? a.exogeneous and remaaining constant b. endogeneous and remaining constant which is correct?


1. Assume that the market for wheat is perfectly competitive. Suppose the demand curve for wheat is given by: QD = 200 – 2P where QD is the quantity demanded, in bushels, and P i

Economic policy efficiently: The reason for poverty and misery in the developing countries is not essentially the lack of potentialities or resources, human or material, but t

A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is

Features of monopolistic competition: Large number of firms in the industry. There are many small firms each supplying only a small share of the total market output. Hence, no