LaToya asked in Social ScienceEconomics · 1 decade ago

Briefly outline the cardinal theory of consumer behaviour.?


1 Answer

  • ADF
    Lv 5
    1 decade ago
    Favorite Answer

    Cardinal Theory is a utility that applies a value to the extent of preference of one "market basket" to another as compared to Ordinal theory that just places them in the order of preference.

    Example: Ordinal

    A is preferred over B and C

    B is preferred over C


    A is preferred a lot over B and a lot over C

    B is preferred a little over C

    This shows that the difference in preference is much greater for A then B or C, but that the difference between B and C is low. (While in Ordinal you just know that A is most preferred, B is 2nd, and C is third) This then would give you the information that it would take much more to impact consumer's behavior to get them from A to B then from B to C.

    Hope this helps a bit. I'm a part-time MBA student and took a course about this about a year ago, so this is just my summary of what I remember....hope it is good enough to get you started.

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