Which one of the following models describes that buyer is a rational man and his buying decisions are governed by the concept of utility ?

The correct answer is - The economic model

Key Points

• The economic model
  • This model assumes that the buyer is a rational individual who evaluates all available options before making a purchasing decision.
  • It is based on the concept of utility, where buyers aim to maximize satisfaction or value derived from their purchase.
  • Decisions are driven by factors such as price, quality, and availability, which influence the perceived utility.
  • The model emphasizes objective data and logical reasoning rather than emotional or psychological influences.
  • It is often used in economic theories to analyze consumer behavior under the assumption of perfect rationality.

Additional Information

• Other Models of Consumer Behavior
  • The learning model
    • Focuses on the influence of past experiences and learned behaviors in shaping consumer decisions.
    • It emphasizes how repeated exposure to certain stimuli, like advertisements, can create preferences.
  • The systems model
    • Views consumer behavior as part of a larger system that includes social, cultural, and environmental factors.
    • It emphasizes interaction between the consumer and external influences.
  • The psychological model
    • Focuses on emotional, psychological, and personal factors that influence buying decisions.
    • Includes elements such as motivation, perception, attitudes, and personality traits.
• Utility in Economics
  • Utility refers to the satisfaction or benefit a consumer derives from consuming a product or service.
  • In the context of the economic model, buyers prioritize products that offer the highest utility for their money.
  • Concepts like marginal utility are used to understand how additional consumption impacts satisfaction.