Consumer theory

Consumer theory is an area of economics that examines how individuals make decisions about spending their money. It explores how consumers choose different goods and services based on their preferences, budget constraints, and the prices of items. The theory helps to understand where consumers derive satisfaction, known as utility, and how they optimize their choices to get the most value for their money. Ultimately, consumer theory reveals patterns in consumer behavior, influencing market dynamics and informing businesses about how to better meet customer needs.