Theory of Consumer Behaviour

Angelina Missal, 25COMC06; Norma Elsa Kurien, 26COMC40; Dhiya Binu, 25COMC15, BCom II Sem C, Department of Commerce, Kristu Jayanti University, Bengaluru, India

The theory of consumer behaviour explains how consumers make choices about purchasing goods and services to maximize their satisfaction (utility), given their limited income and resources. It assumes that consumers are rational and carefully compare different options before making a decision. Since income is limited, consumers must decide how to allocate their money across various goods to maximize overall satisfaction.

The theory of consumer behaviour is an important concept in business economics because it helps explain how individual consumers form demand in the market. By studying consumer choices, economists can understand how changes in income and prices influence purchasing decisions. For example, when the price of a commodity falls, consumers are likely to buy more of it, provided their income and preferences remain the same. This relationship between price and quantity demanded forms the basis of the demand curve.

Another key aspect of this theory is the concept of consumer equilibrium. Consumer equilibrium is a situation in which a consumer spends income so that no rearrangement of expenditures can increase total satisfaction. This is achieved when the marginal utility obtained from the last unit of money spent on each good is equal. At this point, the consumer derives maximum possible utility from the available income.

The theory of consumer behaviour is also helpful for businesses and policymakers. Firms use it to understand consumer preferences, design products, and set suitable pricing strategies. Governments rely on this theory to analyze the impact of taxes, subsidies, and price controls on consumer welfare. Overall, the theory provides a systematic framework for understanding consumer decision-making and plays a vital role in economic analysis.

Consider a college student with a limited monthly budget who spends money on food and mobile data. The student aims to maximize satisfaction from both goods while staying within the given income. Initially, spending on food provides high satisfaction because it fulfils basic needs, while spending on mobile data provides communication and entertainment. As the student consumes more food, the additional satisfaction gained from each extra meal gradually decreases, whereas spending on mobile data may provide higher additional satisfaction after basic food needs are met.

According to the theory of consumer behaviour, the student will allocate income so that the satisfaction gained from the last rupee spent on food is equal to that from the last rupee spent on mobile data. This reflects the law of diminishing marginal utility and the concept of consumer equilibrium. The case demonstrates how rational consumers adjust their spending choices to achieve maximum overall utility within a limited income.

|

 My Blog

|

Beyond Books: How Clubs and Associations Shape Life at KJU Concept Driven Dining: An Emerging Business Trend Shaping Changemakers - Fostering Sustainability and Innovation Beyond Gold: In Search of Smarter Alternatives The Growing Concern of Obesity Among College Students Saturday: Where Work Slows, and Rest Begins Christmas at KJU The Global Community That Makes Kristu Jayanti University Special Finding Myself at Kristu Jayanti University The OG BPM FAM Kristu Jayanti University Extends Warmth Through “Sarthakam Phase II” Beaches or Mountains? The Invisible Pressure of Being Interesting Kristu Jayanti University Champions a Ragging-Free Campus Run with Speed, Win with Focus Red Blossom: Nature's Rhythm and Women's Strength Mental Health Matters as Much as Grades Ethnic Day 2025 - Sanskriti Sangama Exploring Jakarta: A Journey of Culture, Nature, and Urban Life Top 10 Things Every Fresher Should Know About Kristu Jayanti University Innovation, Institutions, and the Engines of Growth: Understanding the 2025 Nobel Laureates in Economics Game Theory: Cracking the Code of College Decisions The Opportunity Cost of Scrolling: What You're Actually Giving Up Home Doesn’t Feel Like Home Anymore A Celebration of Cultures at KJU The Juice Vendor Who Inspires The Economics of a Student: Budgeting for Ramen and Textbooks Excelsior 2025: Carving the Path to Runners-Up Success The 4th Jayantian Cup: Basketball and Boundless Energy at Kristu Jayanti University Voices of Hope: Learning and Healing at Kristu Jayanti My BBA Journey in AI & Data Science at Kristu Jayanti University Books and Loneliness: A Thought Women in Leadership: Breaking Barriers and Building Futures Selective Activism: The Convenience of Caring for the ‘Gram’ My Creative Journey and Why One Should Write Leadership: A Skill Built Over Time Good Health = Good Life The Glamour of Ordinary Things The Art of Being Me What are the Odds? Unlocking the Magic of Probability in Everyday Life From Chennai to Bangalore: A Journey of Culture, Education and New Beginnings Vichaarmanthan The Spark Within Into the Himalayas: Trekking to Gaumukh, The Origin of the Ganga AINOMICS Beyond Academics: Building Character at Kristu Jayanti Between Hogwarts and Utilities You Were Born for Me, Love Beyond Books: Research Culture Decent Work and Economic Growth - Why It Matters to Students My Journey Into the NCC: From Dreams to Reality Finding Peace in God’s Presence The Power of a Genuine Smile Facilities That Shape Futures: Why Kristu Jayanti University Feels Like Home Thank You, Teachers: Lighting the Path Forward Jai Hind 2025 Career path - Linear or Lattice Kristu Jayanti: Transition to Deemed to be University and Opportunities for Student Growth Major Achievements of Kristu Jayanti University (KJU) Department of Social Work-Alumni Interaction Series Writers’ Orientation 2025: A Fresh Chapter From Bus Wars to Backbench Gossips: A Day at Kristu Jayanti (Deemed to be University) Through My Eyes: From College to University The Healing Power of the Classroom Green Nanotechnology from the Oceans: A Breakthrough Study by Kristu Jayanti University Educate for Holistic Development Sustainability Beyond the Podium: My Takeaways from ICEBS 2024 Pangong TSO: A Journey into Serenity World Entrepreneurs' Day Women's Equality Day: Honoring Progress, Inspiring Action Kristu Jayanti (Deemed to be University): A World that Rewards Growth, Not Just Victory Footprints Recalled Parrots of Knowledge Anti-Ragging Call for Blog Contributions: Share Your Voice on the KJU Blog The Serenity of Rain Rising Strong: Building Resilience in Learning and Life New Beginnings!!! Metamorphosis Toxicology and Drug Response: The Thin Line Between Healing and Harm The Strategic Value of Preprints in Academic Publishing Life at Kristu Jayanti: A Campus Culture That Inspires Shivasamudram A Legacy of Learning, A Future of Leadership: Kristu Jayanti University Embracing Nature: Kristu Jayanti’s Green Campus Philosophy A New dawn in Education : Kristu Jayanti College Becomes Kristu Jayanti (Deemed to be University) Vanijyadarpan: A Transformative First-Year Experience माँ से जीवन Life Begins with the Mother Exploring the World Through News: My Experience Leading a Current Affairs Session at Kristu Jayanti College My Experience at HMT: A Day of Learning Beyond the Classroom Why Me? Always Me Savoring India's Culinary Heritage: Our Experience at the Yaan 2025 Vanijyadarpan 2025: Import and Export Procedure Vanijyadarpan 2025: Types of Business Organization YAAN 2025: A Culinary Journey Across India Adroit 2025: A Celebration of Excellence and Collaboration SDG4: Quality Education Republic Day: A Nation United, A Legacy to Remember Cost Horizons 2025 Ecnotech 2025: Towards A Sustainable Future SDG5: Gender Equality A Session on Script Writing The Ultimate Survival Guide: Tips and Tricks to Get through the Prime of Your Youth International Conference on Asia's Maritime History and Identity at Cultural Crossroad Unnat Bharat Abhiyan (UBA) - Kristu Jayanti Sarva Vikas Viksit Bharat @2047 Meliora 2025: A Celebration of Literary Brilliance Palatum Litterarum Poet's Rendezvous Life: A Journey, Not A Problem Prodigy 2025 Embracing Diversity and Growth: My Journey at Kristu Jayanti College, Autonomous, Bangalore Millets & Organics - International Trade Fair 2025 The Gentlemen's Game ft. KJC Pre-Event to International Trade Fair 2025: Organics & Millets A Grain of Hope: Millet
International Choreographers Day The World Day of War Orphans International Human Solidarity Day National Energy Conservation Day 2022 International Universal Health Coverage Day Civil defence raising day 2022 Good food sprouts from good soil International Day of Persons with Disabilities 2022 Safeguard nature, because it's your home College Canteens are not fancy restaurants but MEMORIES forever Lead the best future by being the best learner today The Magic of Christopher Nolan A Narrative about how College help to Transform the Dream My Friends at the Entrance "Education is the most powerful weapon which you can use to change the world."- Nelson Mandela "The children of today will make the India of tomorrow”- Jawaharlal Nehru Get the education that needs to discover your authentic self A walk down memory lane ‘Meet the Scholar’: A new chapter in the book memories Chavara Square Truth Never Dies: International Day To End Impunity For Crimes Against Journalists Ethnic Day 2022: Diversity meets Unity World Sight Day 2022: “Love Your Eyes” Let's work together to end world hunger Kalajyothi’ - An Emotion Road Safety Awareness Campaign was held by Kristu Jayanti College KJC commemorated "World Students Day" to honour Dr. APJ Abdul Kalam's devoted service to the country KJC Caters to your Welfare to the Finest International Day of the Girl Child The Equal Opportunity Cell in Kristu Jayanti College KJC- An Ideal Filmmaking Environment for Students The Next Level My Experience in the College’s Mission to Nurture Academic Excellence in Students The Next Level I am a Jayantian KJC: The Dream We Have for College Life My Place of Happiness Amidst Chaos What is Literature?
Admissions Open 2026–27: Enroll now for UG, PG, and Law programmes for the academic year 2026–27 Apply Now