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Consumer theory seeks to predict their purchasing patterns by making the following three basic assumptions about human behavior:
- Utility maximization —Individuals are said to make calculated decisions when shopping, purchasing products that bring them the greatest benefit, otherwise known in economic terms as a maximum utility.
- Non-satiation —People are seldom satisfied with one trip to the shops and always want to consume more.
- Decreasing marginal utility — Consumers lose satisfaction with a product the more they consume it.
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