1.2.10: Alternative views of consumer behaviour

• Economists assume that all economic agents are rational
• It is assumed that:

  Consumers aim to maximise utility

  Producers aim to maximise profit

  Governments aim to maximise social welfare
• Reason for consumer irrational behaviour: Consumers are influenced by others to make certain purchases
• Reason for consumer irrational behaviour: Buying the same products due to habitual behaviour
• Reason for consumer irrational behaviour: Weakness at computation - Inability to calculate the rational decision, or emotions taking over