Market Mechanisms and Consumer Choice

📋 Course Outline

1. Consumer Rationality and Marginal Utility
2. Market Demand and Supply
3. Market Structure and Equilibrium
4. Surplus, Costs, and Economic Choices

📖 1. Consumer Rationality and Marginal Utility

🔑 Key Concepts & Definitions

• Rationality hypothesis : means that the consumer seeks to maximize satisfaction while minimizing expenditure.
• Marginal utility : the utility of the last unit purchased by the consumer.

★ Must-know

📌 The consumer continues buying as long as the pleasure from the last unit is greater than or equal to its cost.

Further detail

• The customer accepts the fourth portion only because it costs one euro more, since the pleasure provided by it has decreased and the customer refuses to pay the full price.

💡 Memory Hook

Comparing marginal pleasure with price leads to continued or stopped purchasing.

📖 2. Market Demand and Supply

🔑 Key Concepts & Definitions

• Market : a space where economic agents, including consumers, sellers, and public authorities, meet and where supply and demand are connected.
• Individual quantity : the quantity chosen by a single buyer or seller for a given price.
• Market quantity : the total of all individual quantities for a given price.

📝 Essential Points