Theory of consumer behaviour, Managerial Economics

Theory of Consumer Behaviour

Through the study of theory of consumer behaviour we can be able to explain why consumers buy more at a lower price than at a higher price or put differently why individuals or households spend their money as they do. We shall assume that the consumer is rational and aims at maximising his satisfaction, so given his income he consumes that basket of goods and services which produces maximum satisfaction.  Two major theories explain the behaviour of the consumer, neither presents a totally complete picture.  The first approach is the marginal utility, or cardinalist approach.  The second approach centres on the indifference curve analysis or the ordinalist approach.

Posted Date: 11/27/2012 5:07:29 AM | Location : United States







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

Write discussion on Theory of consumer behaviour
Your posts are moderated
Related Questions
Q. Explain about Long run production function? Long run is a phase adequately long so that all factors together with capital can be changed. The factors that can be increase

Q. Time Factor for Determinants of Demand? Price-elasticity of demand depends moreover on the time that consumers take to adjust to a new price: longer the time taken, greater

Q. Concept of economies of scale? Economies of scale refers to the cost advantages that a business attains because of expansion. 'Economies of scale' is a long run concept and

Why does the demand curve slope downwards? As Figure above demonstrates, demand curve slopes downward to the right. Downward slope of the demand curve reads the law of demand i

The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-2.5Py+7.5Pz

Frank H. Knight treated profit as a residual return to uncertainly profit. Obviously knight made a distinction between risk and uncertainly he divided risk into calculable and non-


Explain about Pragmatic Managerial economics is pragmatic. In pure micro-economic theory, analysis is performed based on certain exceptions that are far from reality. Though in

A company is selling a  particular brand of tea and wishes to introduce a new flavor. How will the company forecast demand for it.

According to J.B. Clark's profits arises in a dynamic economy, not in a static one. A static economy is one in which there is absolute freedom of competition population and capital