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Behavioural assumption


An assumption about the way in which individual economic agents - consumers and firms - behave, and most especially about their motives, and the way in which they respond to differences between expected and actual outcomes. Examples of, such assumptions are the profit-maximizing assumption in the theory of the firm, the utility maximization assumption in the theory of consumer demand, and the assumption that firms respond to unexpected inventory accumulation by cutting back production in the macroeconornic theory of incorne determination.

Reference: The Penguin Dictionary of Economics, 3rd edt.