Consumer Theory Assignment Help

Definition of Consumer theory

Consumer theory accumulates the theory of spending money on given preferences. It exhibits the course how people settle on the choices of spending their money and their budget limitations. The theory studies the nature of individual that how they make choices given their income and price of goods and services.

How Consumer theory works?

For example, let’s say ABC consumer who has $200 (his budget limitations) budget to choose between pizza and video game (the bundle of goods and services), and as the matter of fact the pizza will cost him $10 and video games take $50, as a result ABC could buy 20 pizzas or 4 video games, or 5 pizzas or 3 video games, and he could keep all money by himself. The question is how ABC consumer will spend his money, and consumer theory attempts to answer the question.

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