Consumer demand: In the theory of consumer demand, demand functions are derived for commodities by considering a model of rational choice based on utility maximization together with a description of underlying economic constraints. In the theory of consumer demand, these constraints include income (which is treated as given here while it might be endogenous in a more general model of household decisions), and commodity prices, which are also fixed from the perspective of an individual household.
See also: consumption, income, saving, life-cycle hypothesis, retirement
Literature: Pudney (1989)
|Entry by: Joachim Winter|
June 17, 1999
Direct questions and comments to: Glossary master