Consumer choice or Consumer Behavior
1. Individual demand curves can be constructed from observing consumer
purchasing behaviors as we change price.
a. This is called REVEALED PREFERENCE
b. Market demand curves are constructed by aggregating individual demand
curves for specific commodities.
2. Individual preferences can be modeled using a model called indifference curve -
budget constraint and from this model we can derive an individual demand curve.
a. The budget constraint shows the consumer's ability to purchase goods.