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Completeness implies that some choice will be made, an assertion that is more philosophically questionable. In most applications, the set of consumption alternatives is infinite, and the consumer is unaware of all preferences. For example, one does not have to choose between going on holiday by plane or train.
The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves.It analyzes how consumers maximize the desirability of their consumption (as measured by their preferences subject to limitations on their expenditures), by maximizing utility subject to a consumer budget constraint. [1]
Consumer preference, or consumers' preference for particular brands over identical products and services, is an important notion in the psychological influence of consumption. Consumer preferences have three properties: completeness, transitivity and non-satiation.
Weak preference implies that individual either strictly prefers a 1 over a 2 or is indifferent between them. Indifference occurs when an individual neither prefers a 1 to a 2, nor a 2 to a 1. Since (by completeness) the individual does not refuse a comparison, they must therefore be indifferent in this case.
There are four axioms of the expected utility theory that define a rational decision maker: completeness; transitivity; independence of irrelevant alternatives; and continuity. [11] Completeness assumes that an individual has well defined preferences and can always decide between any two alternatives.
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Preferences are complete. The consumer has ranked all available alternative combinations of commodities in terms of the satisfaction they provide him. Assume that there are two consumption bundles A and B each containing two commodities x and y. A consumer can unambiguously determine that one and only one of the following is the case:
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