Theory of consumer behavior

The theory of consumer behavior is designed to take into account several restrictions that do not allow people to acquire whatever they want. One of the means of restraint is fiscal restraint. Each person's income is limited to some extent. In this case, the theory of consumer behavior is expressed in the restriction of the acquisition in view of the limited budget. Another means of deterrence is the cost of the desired benefits. All the benefits presented in the market are endowed with a certain price. The price of goods is formed from the costs of their production, arising from the need to use in the production of rare and expensive resources.

Mechanisms and the theory of consumer behavior are based on certain provisions.

The first of these is multiplicity. The needs of the whole society and of man in particular are quite large and varied. In this regard, they provoke the emergence of a variety of benefits that can contribute to meeting the needs. The theory of consumer behavior, referring to the issue of choice, suggests the existence of several possible options in a certain period of time. In other words, a person always has something to choose from.

The next position, which is based on the theory of consumer behavior, is sovereignty. He expresses himself in the ability of a person to make his own (individual) decision to purchase one or another good without having a decisive influence on the producer. Together with this, the market mechanism, summing up individual solutions of a large number of consumers, brings them together to the manufacturer. When choosing people of certain goods and acquiring them when paying a certain price, the producer of these goods receives not only profit, but also the right to the subsequent development of production. Consumer sovereignty provides for the ability of consumers to influence producers. In other words, it is a person's power over the market, expressed in the ability to determine in what quantity and what kind of goods it is necessary to produce.

An important factor contributing to the formation of consumer choice is the system of preferences. The same (same) benefits can bring different benefits to different people. Each consumer has its own set of values. There is no objective unified scale that makes it possible to determine the utility of one or another good. However, each person has his own subjective scale of preferences. Rational in this case is considered the behavior of a person, in which he, knowing about the necessary set of benefits, is able to compare different sets, choosing the optimal one for himself.

The quantitative (cardinal) theory of consumer behavior in the process of solving the question posed presupposes the probability of measurability of utility. In this case, it is assumed that when you consume the good, you can measure its useful value. Thus, measurements can help determine the difference between goods.

The fundamental assumption of this theory of consumer behavior is the requirement to reduce marginal utility. Thus, we can formulate the equilibrium rule. Consumer balance is achieved in a situation in which a person with a limited budget is not able to increase the utility of the total by spending less money to get one good and more - to purchase another. A rational person will strive to acquire what is most beneficial.