Economics for Common People – Part 9 Consumer Behaviour
1️⃣ Who Is a Consumer?
A consumer is a person who buys goods and services to satisfy needs and wants.
Every individual is a consumer.
2️⃣ What Is Utility?
Utility means satisfaction.
When you consume a product and feel happy or satisfied, that satisfaction is called utility.
Different people get different utility from the same product.
3️⃣ Law of Diminishing Marginal Utility
This law states:
As a person consumes more units of a product, the additional satisfaction decreases.
Example:
- The first slice of pizza gives high satisfaction.
- The second slice gives less satisfaction.
- The third slice gives even less.
Eventually, satisfaction may become zero.
4️⃣ Budget Constraint
Consumers have limited income.
They must decide how to spend it wisely.
They try to maximize satisfaction within their budget.
This decision-making is studied in consumer behaviour.
5️⃣ Rational Consumer
In economics, we assume that consumers are rational.
That means they:
- Compare prices
- Compare quality
- Choose the best possible option
However, in real life, emotions and advertisements also influence decisions.
6️⃣ Why Consumer Behaviour Matters
Understanding consumers helps:
- Businesses design better products
- Governments frame policies
- Markets function efficiently
Consumer decisions drive the entire economy.
The economy moves because consumers choose.
— Shaktimatha Learning
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