Understanding Consumer/ Producer Behavior

• Understanding decision by human decision making units with reference to their production, acquisition, usages and disposition of good, services, activities and ideas in a given time period.

• Assumption:

                 Preferences are complete, transaction and non-satiated.

     Willingness to buy and consumer satisfaction

• The concept utility

                The satisfaction people derive from their consumption activities.

• Assumption:

                  Tastes and preferences are fixed and given and play a large role in decision making.

                  People allotted their income to maximizing their satisfaction or total utility.