Consumer decisions
Factors influencing decisions    What is a market? Demand Supply Equilibrium Excess demand   Excess supply   Shifts of demand  Shifts of supply Convergence to equilibrium

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In economics, it is assumed that consumers seek to maximise utility subject to a budget constraint. In other words, consumers seek to derive the most satisfaction from any given amount of money at their disposal.  Whilst this assumption may not hold true for every single consumer decision, it is consistent with 'rational' behaviour, and allows us to make predictions about how consumers are likely to be behave in certain situations.  Indeed, business decisions that seek to influence consumer choices are based on the assumption of a rational consumer.

Consumer choices will depend on a range of internal and external factors that shape their consumption patterns.  The internal influences include genetic disposition (e.g. is a person an instinctive 'risk taker' or someone more cautious or 'risk averse?'), learned patterns of behaviour from childhood (e.g. is someone constantly in search of 'a bargain' because of an impoverished childhood?) or even a person's concern about status or their 'self-perception' (e.g. does a person purchase the 'wrong' types of foods because of negative 'self-image?').  Many of these 'internal influences' are indeed shaped by the numerous 'external influences' that shape consumption patterns.

External influences on consumer behaviour include the following:

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