Who is a rational consumer?

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Who is a rational consumer?
Who is a rational consumer?
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Rational consumer - who is this? What are its characteristics?

General information

rational consumer

Let's first find out what consumer behavior is. This is the name of the process of generating demand from people who choose goods from those on the market, taking into account their prices and the size of their personal budget. A rational consumer is a person (buyer) in economics that enters into economic relations in order to realize their material and spiritual needs. All his actions carry the principle of balance and the relative usefulness of the goods. Considering that our needs are unlimited and diverse, and the income of the buyer is limited, he must constantly make a choice from a large number of goods that are offered to him on the market. It can be assumed that he strives to purchase the best products from the entire range.

Reason for this behavior

rational consumer is

When the problem of personality was studied, the results were obtained, according to which the source of any activity is exactly needs. Functional or psychological need or deficiency specificallysubject, object, individual, social group or society lead to the fact that they want to satisfy needs. But within the limits of limited income, one has to make a choice. In order to satisfy his needs, each person in the market of services and goods is guided by his subjective line of behavior, position as an element of the economy and the current economic situation. In order for a person to be said to be a rational shopper and to behave appropriately, he must make decisions and take actions that are made on the basis of choice when comparing options and take into account many different factors. All this is done in order to find a profitable and expedient offer for yourself. A rational consumer maximizes utility at the point where the budget line touches the indifference curve. It should be remembered that he has a limit in the form of the size of his own income. Alas, now there are no objective criteria for determining which set of goods can be recognized as the best for each particular consumer. This choice is made from a subjective point of view. From this follows the peculiarity that a person does not always behave rationally.

Consumer Behavior Theory

rational consumer is in the economy

She considers rational consumers to be those people who have an individual preference scale and operate within it with a limited income. Such a person tries to achieve the maximum degree of satisfaction. And rationalism in this case is to getmaximum utility with limited income. But at the heart of consumer choice is always the desire of a person to satisfy one or another of his needs. Certain problems are created by the fact that each individual has his own unique preferences. Their summation deals with market demand. Through this tool, the desires of people are expressed. They can influence the market situation by dividing their income between different services and goods. The price and supply of products on the market largely depend on the consumer factor.

Freedom of choice

First, let's note the importance of consumer sovereignty. This is the name given to the ability of the aggregate consumer to influence producers due to the free choice of goods on the market from all those presented. This is a very important mechanism from an economic point of view. If it is limited, then a bias will be formed with the consumption of certain goods and their production. Ultimately, this can lead to a crisis. It should be noted that there are quite a few mechanisms of modern society that lead to a distortion of freedom of choice:

  1. Imitation effect. This is the name given to the situation when the consumer follows the majority of people.
  2. Snob effect. Within the framework of this situation, the consumer wants to stand out from his environment.
  3. Exclusivity demonstration effect. In this situation, it is envisaged that a person persistently demonstrates prestigious consumption.

Utility

rational consumer maximizes utility

Let's talk about this criterion and its importance within free choice. Utility is a certain degree of satisfaction that is provided by the consumption of a certain good. And the more it is, the less the effect will be. From this point of view, the marginal utility of some product is of interest. So, if you use a product in large quantities, then over time it will not satisfy a person. But after a certain time, it will restore its properties. The theory of marginal utility speaks about how best to allocate your funds to fully meet existing needs in the presence of limited resources. It should be noted that the parameters in the calculation are of interest only within the framework of subjective human needs. In other words, each individual will have his own product in a certain quantity. An example would be a hungry person and a bowl of soup. The first serving of food will have the greatest benefit. The second bowl of soup will have less utility. He can already refuse the third one, because he will be satisfied.

Gossen's Laws

There are two in total:

  1. The law of diminishing marginal utility. He says that within the framework of one continuous act of consumption, each subsequent unit brings less satisfaction with the same amount of everything else.
  2. Utility maximization rule. To obtain the best result from a certain amount of goods, they must be provided in a certain amount, when their marginal utility will be the same foreveryone.

Features

rational consumer maximizes utility at the point of contact

A rational consumer will choose a touch point on the budget line, the highest of all indifference curves available to him. The utility maximization rule states that the consumer's income should be distributed in such a way that each last used unit of money spent on a good or service brings the same degree of efficiency. At the same time, it should strive for the highest value. Let's look at this aspect in more detail with an example. The consumer has 12 rubles. He is offered two goods: A and B. The first product costs 1.5 rubles, and the second costs only one monetary unit. A has a utility of 4.5 utils, while B has 9. In the end result, for the optimal scheme, it will be necessary to buy 6 goods A, and 3 - B. The following factors should be taken into account:

  1. Money income.
  2. Preferences and tastes.
  3. Price of goods and services.

Conclusion

a rational consumer will choose on the budget line

Being a rational consumer is in everyone's interests. But alas, due to a number of features, this is not always a reality. As confirmation, we can consider the previously mentioned imitation effect. Let's take an example: every person should eat well. Then his body will be able to fully perform its functions and will be more resistant to various diseases, stress, stress, and so on. But nowone can often observe a situation when a person decides to acquire a “status” thing, as a result of which he has a difficult financial situation. Moreover, it can reach such a level that you will have to significantly save on food, which will lead to various serious he alth consequences.

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