When we talk about consumer theory in What are the  microeconomics, we are mainly referring to choices, their structures and implications. If, on the one hand, the firm can choose what and how to produce , on the other hand, individuals can choose what and how to consume.

Over the decades, several scholars have developed models of consumer behavior theories . Each of them sought to understand what motivates a purchase decision based on different assumptions .

To give you an overview of the main proposals, we have selected the most well-known and applied theories on the market. Let’s go!

Classical consumer theory (18th century)

Classical consumer theory emerged in the 18th century, with the abandonment of monarchies and the arrival of Western capitalism in Europe. Its gambling database main objective is to explain how concepts of value, price, supply, demand and distribution operate in reality.

The most important work of the period is “ The Wealth of Nations ” by Adam Smith, published in 1776. According to the Scottish thinker’s theory, the clash between the forces of supply and demand would self-regulate the market, balancing production costs and the final price .

Marked by rationality this consumer theory

 

Assumes that purchasing decisions are motivated by simple necessity and that the cost of production is the determining factor in price. That is, if you need to eat, you will buy rice. If you need to dress, you will buy clothes.

If you want to study more on the the first step is to define the main terms subject, some of the main classical economists are: David Ricardo, Thomas Malthus, John Stuart Mill, Jean-Baptiste Say and Eugen Böhm von Bawerk.

Neoclassical consumer theory (19th century)
Neoclassical consumer theory emerged in be numbers the late 19th century, challenging the utilitarian arguments of classical economists such as Adam Smith. For this new school of thought, the consumer’s perception of the value of the product is the determining factor in its price .