Answer to Question #74263 in Macroeconomics for David

Question

What is neoclassical economics

Answer 1

IN a few words Neoclassical economics is a theory that focuses on how the perception of efficacy or usefulness of products affects market forces: supply and demand. It suggests that because the consumer's goal is utility maximization, or customer satisfaction, and that the organization's goal is profit maximization, the customer is ultimately in control of market forces such as price and demand.
One of the most important tenets of the neoclassical theory is that consumers often perceive a product as being more valuable than the cost of production, thus affecting demand for the product.