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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 person-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.
In the context of mental health, consumer is also a term applied to describe a person living with mental illness.
Concern over the best interests of consumers has spawned much activism, as well as incorporation of consumer education into the school curriculum. There are many non-profit publications available to assist in consumer education such as Consumer Reports or Choice Magazine.
Within many selling companies "consumer" has come to be a derogatory term which means a "purchaser of products who is not very intelligent." This is in contrast to the meaning of customer, which is defined as "an intelligent purchaser who has power in the purchasing relationship between buyer and seller."
In biology, a consumer is a species that consumes other species and organisms made by producers.
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