2.1 Theory of Consumer Behaviour
Theory of Consumer Behaviour explores how individuals make decisions to allocate their resources, particularly their income, to various goods and services. Central to this theory is the utility function, which represents the satisfaction a consumer derives from consuming different products. By analysing the relationship between consumption patterns and preferences, the utility function helps explain how consumers aim to maximize their overall satisfaction. Additionally, several factors—ranging from personal tastes and income levels to market conditions and cultural influences—determine consumer choices. Understanding these determinants provides valuable insights into the decision-making process in different economic environments.
