The theory of consumer behavior is designed to take into account several restrictions that do not allow a person to acquire everything that he wants. One of the means of limitation is budget containment. The income of each person is more or less limited. In this case, the theory of consumer behavior is expressed in the restriction of acquisition due to the limited budget. Another deterrent is the value of the desired benefits. All the benefits presented on the market are endowed with a certain price. The price of goods is formed from the costs of their production, arising from the need to use rare and expensive resources in the production.
The mechanisms and theory of consumer behavior rely on some points.
The first of these is plurality. The needs of the whole society and man in particular are quite large and diverse. In this regard, they provoke the emergence of a variety of goods that can contribute to the satisfaction of needs. The theory of consumer behavior, regarding the issue of choice, suggests the existence of several possible options in a certain period of time. In other words, a person always has plenty to choose from.
The next statement on which the theory of consumer behavior is based is sovereignty. It is expressed in the ability of a person to make his own (individual) decision on the acquisition of one or another good, without exerting a decisive influence on the manufacturer. Along with this, the market mechanism, summing up the individual decisions of a large number of consumers, brings them together to the manufacturer. When people choose certain goods and acquire them while paying a certain cost, the producer of these goods receives not only profit, but also the right to the subsequent development of production. Consumer sovereignty provides for the ability of consumers to influence producers. In other words, it is a person’s power over the market, expressed in the ability to determine in what quantity and what kind of benefits it is necessary to produce.
An important factor contributing to the formation of consumer choice is the system of preferences. The same (same) benefits can bring different benefits to different people. Each consumer has his own specific set of life values. There is no objective unified scale to determine the usefulness of one or another good. However, each person has his own subjective scale of preferences. In this case, the person’s behavior is considered rational , in which he, knowing the set of benefits he needs, is able to compare different sets, choosing the optimal one for himself.
The quantitative (cardinalist) theory of consumer behavior in the process of solving the question poses the probability of measurability of utility. In this case, it is assumed that when consuming a good, its useful value can be measured. Thus, measurements can help determine the difference between benefits.
The fundamental provision of this theory of consumer behavior is the requirement to decrease marginal utility. Thus, one can formulate the equilibrium rule. Consumer balance is achieved in a situation in which a person with a limited budget is not able to increase the total utility while spending less money to get one good and more to buy another. A rational person will strive to acquire what will bring the greatest benefit.