ELI5: Explain Like I'm 5

Consumer theory

Consumer theory is all about how people use their money when they are choosing what to buy. Companies use consumer theory to try to figure out what people like to buy so they can create products people will want to buy.

For example, when you go to a store, you need to decide what to buy with your money. Companies look at consumer theory to figure out what kind of products people might be interested in. They make sure to create something that people like and are willing to buy.

Consumer theory looks at things like quality, price, and how the product fits into people’s lives. Companies look at this information to figure out what people will want to buy.

It also looks at how people make decisions when they have limited resources, like a certain amount of money to buy something. This helps companies figure out how much people are willing to pay for something.

Consumer theory also looks at how much people will want something even if it is expensive. Companies use this information to make sure they create products that people want to buy even if they cost a lot of money.

So, consumer theory helps companies figure out what products people will buy and how much people are willing to pay for them.