Consumer choice: the important decisions

seminars to discuss the best advertising strategies are popular as ever.The fact that modern markets of developed countries are oversaturated.And you can sell the product, only once by selecting it from a variety of similar.Therefore, it is very difficult to bring to market a new product, it is difficult to reach the area where many manufacturers are already spinning.However, if the need is there, the business owners are taking up the book, which describes what the consumer choice.Or hire those who are reading the book in high school.So, more about consumer choice.

This theoretical construction belongs to microeconomics.And considering how connected preference in the selection of goods and services, and the total expenditure on consumption of different goods.In general, the connection between the personal preferences, money spent on consumption and the demand curve is seen in the economy has long been and is a keen interest of economists for decades.The theory of consumer choice examines how consumers are trying to achieve a balance between the preferences and costs by maximizing the use of the purchased goods.The needs are endless, but there are always budget constraints, so even the most impractical buyer tries to buy that at the lowest cost will be the most beneficial for him.

preferences - is the desire of every individual to consume the goods or services that are actually manifest themselves as the choice of viable options, depending on income (the possession of wealth).It is also the time appointed by the consumer to use the goods and services.Consumer choice and its features are located on the border of the study of microeconomics and psychology of consumption.

Researchers are using models and charts to predict the popularity of a product.Commonly used data obtained from the sale of certain goods in the same class.Scientists presume that the consumer will seek to make optimal use of resources within their budget.Which variables are used in these calculations?Price per unit, the price of very similar products and consumer wealth.

As the price rises, consumers will increasingly turn to other, cheaper alternatives.And it is clear from the everyday logic of a person without studying economics.After all, if a person can not afford one copy of the product, consumer choice will be directed toward more inexpensive equivalent.This is called the substitution effect.But if the income grows, increasing demand for commodities in general, in this situation, consumers will look better, though expensive goods.Because the income effect is shown.

Of course, the theory of consumer choice has disadvantages.The thing certain assumptions that make errors in calculations.For example, discussed the theory assumes that everyone is aware of their preferences are constantly when he is required to make the purchase.Also inaccurate is that if the two products are identical, and the consumer is aware of them as absolutely equal, that actually is not true.Also automatically it considered that if the first item would prefer the second, and the second - the third, the first item will choose rather than the third.As we see, the economic analysis sees the client as a logical and precise machine.But there are other factors affecting consumer choice.

very interesting arguments of economists about the choice between consumption and leisure.Consumption needs to make money, that is labor.A vacation involves a refusal to work, and the uninitiated their generally limited time labor.Here everyone makes choices every day, and it is usually a difficult choice.Such an application of the theory is interesting, clear, and people far from the economy.