International Journal of Development in Social Sciences and Humanities

The standard economic theory states that all stakeholders are rational individuals who make decisions in their best interest. Rational behaviour includes two components, rational consumer choice and rational producer choice. Assumptions of rational consumer choice include consumer rationality, which states that consumers are able to rank goods based on their preferences, and consumers always prefer more of a good to less. Moreover, it is also assumed that consumers have perfect information about goods and services in the market, and that they aim to maximize the utility they derive from a good or service that they consume.