What is Consumer Behavior
The behavior of the consumer who are the one to decide with regards to select, purchase and then consumption of goods as well as services for the satisfaction of their needs and want is known as consumer behavior.
- Basic points of Consumer Behavior or Equilibrium
- Resources to fulfill the unlimited wants are limited and they have alternative uses
- The prices are fixed for goods or commodities
- The main and basic aim of consumer is to fetch the maximum available satisfaction from the limited resources.
- The technique and means to get the equilibrium point, which maximizes the satisfaction is known as theory of consumer behavior.
There are two main approaches to achieve the equilibrium point i.e.
- The Cardinal Approach
- The Ordinal Approach
The Cardinal Approach to Consumer Behavior
- The cardinal approach is focused on consumer view on utility. The economics approach invites the consumer how much utility the consumer obtains for goods or service the buy. The cardinal approach can be measured qualitatively.
The Ordinal Approach to Consumer Equilibrium
- According to ordinal utility approach the utility of any specific commodity cannot be calculate but the consumer of any commodity is capable to rank the various alternatives. If we consider the goods as bundles for instance, any consumer prefers 1 mango and 1 orange 2 apples or 2 mangos and 1 apple.