Consumer Preferences and Microeconomics
Introduction Consumer preference is defined as the subjective tastes of individual consumers. It is measured by the satisfaction they receive with those items after they've purchased them. This satisfaction is often referred to as utility. We all have different tastes and preferences when it comes to commodities and these preferences vary from person to person. We may prefer a commodity over another regardless of the price. For example a person may prefer oranges over apples regardless of their ability to buy it. These tastes and preferences play a crucial role in the choices we make, that is, consumer choice. Consumer choice refers to how we choose to use scarce resource to satisfy our wants. This post aims to explain how microeconomics views and understands these consumer preferences. Therefore, we will be delving deeper into the microeconomic explanation of consumer choice and preferences. Assumptions of consumer preferences Under microeconomics, consumer prefere...