Theory of consumer behavior, Microeconomics

Assignment Help:

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).   


Related Discussions:- Theory of consumer behavior

Open access regime , Open Access Regime Normal 0 fa...

Open Access Regime Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Types of privatisation of the economy, Privatisation in the narrow sense ca...

Privatisation in the narrow sense can take several forms: a) Total Denationalisation: This implies complete transfer of ownership of apublic enterprise to private hands. Some

Foreign investment, Foreign investment: To attract foreign investment ...

Foreign investment: To attract foreign investment – Developing Plans are used as a means of attracting foreign investment or foreign aid.Foreign government and international o

How the inflation effect on import and export of the country, How the infla...

How the inflation effect on the Import and Export of the country?  When general price level enhances in an economy, local currency is devalued. Economy has to spend more on imp

Gross national product, what is the formula for finding gross national prod...

what is the formula for finding gross national product?

PED, what do we mean by The narrowness of definition of the commodity.

what do we mean by The narrowness of definition of the commodity.

Factors of production, The process of production needs several inputs. Thes...

The process of production needs several inputs. These inputs are known as the factors of production. In most cases, firms own some of the factors of production while some have to b

Allocative efficiency, Allocative Efficiency The production of product...

Allocative Efficiency The production of products and services such that stages of production are closely tied to levels of customer demand.

How many strategy combinations, Janet decides to play a game with her child...

Janet decides to play a game with her children, Jay and Jill (who are fraternal twins) and Mo. Each child is in their own room and cannot communicate with each other. Suppose Jill

Project, Explain welfare grants and subsidies

Explain welfare grants and subsidies

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd