Theory of consumer behavior. Types of utility functions and a critical analyses of the theory of demand

Academic Paper from the year 2017 in the subject Economics - Micro-economics, , language: English, abstract: The basis of the theory of consumer behavior rests upon the theory of demand. Theory of demand begins with the 'law of demand' which states that the quantity demanded of a commodity varies inversely with its price, ceteris paribus (keeping other factors unchanged, e.g., taste, preference, income etc. of the consumer). Now in the theory of consumer behavior, we assume the consumer is a rational individual who wants to maximize her utility from a basket of consumable goods given her income unchanged. This essay / monograph is written by keeping in mind the major objective of bridging the gap between Bachelor's and Master's levels of studies in the field of Economics and specifically in the area of Advanced Microeconomic theory across the world. The important topic of "The theory of consumer behavior" is discussed in detail with all the major sub-topics and critical analyses.