Consumer Economics is an area of Economics that studies
Consumer Buying.There are many other forms of Economics too; like Business
Economics ,Managerial Economics, Labour Economics and so on. Consumer Economics
is the area of Economics that studies Consumer Consumption.
Business Economics is a subsidiary of Consumer Economics in
many ways. Consumer would not buy anything for which he has no Utility. So
Utility function is a very important component of Consumer Economics.
One of the ancillary axioms of Consumer Economics is the
Marginal propensity to store. When there is Consumer crisis of any kind there
is Marginal Propensity to Store.
The Utility Function is a function of two variables. It is
directly proportional to Criticality of need and inversely proportional
availability of Substitutes. Less the
availability of substitutes higher is the Utility and higher the Criticality of
need higher is the Utility.
Factors like Supply and Demand are influenced by the Utility
function and hence Inflation and Deflation. Higher the Utility function higher
will be the Price in the Price-Demand relation normally discussed in Economics.
Increase in price could result in increased Demand a result contrary to
conventional trajectories under the influence of higher Utility functions.
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