In economics, consumers are individuals or households that "consume" goods and services generated within the economy. Since this includes just about everyone, the term is a political term as much as an economic term when it is used in everyday speech. Typically when businesspeople and economists talk of "consumers" they are talking about man-as-consumer, an aggregated commodity item with little individuality other than that expressed in the buy/not buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic and psychographic[?] profiles of market segments, marketers are engaging in personalized marketing, permission marketing, and mass customization.
In standard microeconomic theory, a consumer is assumed to have a budget which can be spent on a range of goods and services available on the market. Under the assumption of rationality, the budget allocation is chosen according to the preference of the consumer, i.e. to maximize his or her utility function.
In time-series models[?] of consumer behaviour, the consumer may also invest a proportion of their budget in order to gain a greater budget in future periods. This investment choice may include either fixed rate interest or risk-bearing securities.
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