Chapter 4 Theory Of Consumer Behaviour Pdf Utility Economic Surplus 1. introduction to the theory of consumer’s behaviour utility analysis: the price of a product depends upon the demand for and the supply of it. in this part of the article we are concerned with the theory of demand, which explains the demand for a good and the factors determining it. individual’s demand for a product depends upon the price. An indifference curve is the locus of points – particular combinations or bundles of goods which yield the same utility (level of satisfaction) to the consumer, so that he is indifferent as to the particular combination he consumes. an indifference map shows all the indifference curves which rank the preferences of the consumer.
Theory Of Consumer Behaviour Pdf Utility Economic Surplus Utility ordering seeks to rank goods based on the attractiveness of the characteristics of the good to the consumer. in his new model of consumer theory, lancaster 1966 assumed that the relationship between economic activity and goods consumed during an economic activity is linear. this is captured in eq. 6 below:. Consumer surplus is based on the economic theory of marginal utility, which is the additional satisfaction a consumer gains from one more unit of a good or service. the utility a good or service. Maximize?happiness, satisfaction, utility.we don’t make. about what gives people happiness.utilitytotal utility: the total happiness o. gets from consuming some amount of a good.marginal utility: the extra utility de. nit of a good.diminishing marginal utility• as a household consumes more of a goo. Consumer behavior theory: these theories consider a range of factors that influence the choices of the consumers. intrinsic properties: these are the internal prop erties of the object. neoclassicalmicroeconomics:thisisthebranch of economics that examines consumer utility. introduction economic theories on consumer behavior have.
Comments are closed.