The Economic Model of Consumer Behavior centers on rational decision-making driven by utility maximization within budget constraints. It assumes that consumers aim to allocate their income efficiently to derive the greatest satisfaction or utility from goods and services.
This model incorporates concepts such as marginal utility, where consumers weigh the additional satisfaction gained from each product unit against its price. Factors like income, prices, and individual preferences influence choices, and consumers make rational decisions to optimize their well-being.
Marketers respond by adjusting prices, emphasizing value propositions, and understanding the economic factors that impact consumers' purchasing power. While influential, the economic model is critiqued for oversimplifying human behavior and neglecting psychological and social dimensions. Despite these criticisms, it remains a fundamental framework for understanding how economic factors shape consumer choices in the marketplace.
