Questions On Consumer 's Behavior

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There are four basic assumptions that are made by economists taking into consideration a consumer’s behavior. When economists pursue their research they take into account the consumer’s behavior having clear preferences, a budget constraint, the determination of price, and rational behavior. Having these assumptions allows economists to know what the consumer is thinking while considering a good or service. Since every persons wants/needs are different, we can assume that different households have different preferences towards goods and services. Having clear preferences is one assumption made by economists that consumers show in their behavior. This involves knowing as a consumer, the certain goods and services that are available in the market. However, the buyer must also have some knowledge of the amount of marginal utility they will receive from products they may be potentially purchasing. When a consumer has clear preferences they typically react in different ways: complete, monotonic, and transitivity. Complete meaning, they rank their goods on their preferences. Monotonic is describing the consumer as having the attitude “more is better”. Transitivity prefers goods in different ways meaning: if you prefer Bud Light to Coors Light, but Coors Light to Budweiser than you prefer Bud Light to Budweiser. The second assumption determined by economists focuses on the budget constraint. The consumer has a various amount of income, which then gives them a
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