Theory of Consumer Behaviour:

The  theory  of  consumer  behaviour  offers  an  explanation  of  how  people  as consumers choose which goods and how much of each of them to buy within the limits presented by each person's budget.  By implication, the theory is suggested to explain the law of demand i.e the derivation of the demand curve.

In this chapter, two main alternative explanations of the downward sloping demand curve are presented.  First, the marginal utility theory otherwise referred to as the cardinalist approach.  And second, the indifference curve theory, otherwise referred to as the ordinalist approach.