Revealed preference theory

Revealed preference theory is an economic idea that infers a person’s choices and preferences based on their actual purchasing behavior. Instead of asking people what they like, it looks at the goods and services they buy to understand what they prefer. For example, if someone chooses apples over oranges when both are available at similar prices, it's revealed that they prefer apples. This approach helps economists understand preferences objectively, assuming choices reveal true tastes, and is useful for analyzing consumer behavior and market demand without relying on subjective opinions.