Editing Utility maximization problem (section)

{{Short description|Problem of allocation of money by consumers in order to most benefit themselves}}
{{For|a less technical introduction|Utility}}
{{Multiple issues|
{{More footnotes needed|date=August 2010}}
{{more citations needed|date=March 2011}}
}}

Utility maximization was first developed by utilitarian philosophers [[Jeremy Bentham]] and [[John Stuart Mill]]. In [[microeconomics]], the '''utility maximization problem''' is the problem [[consumer]]s face: "How should I spend my [[money]] in order to maximize my [[utility]]?" It is a type of [[Optimal decision|optimal decision problem]]. It consists of choosing how much of each available good or service to consume, taking into account a [[Natural borrowing limit|constraint on total spending]] (income), the prices of the goods and their [[Preference (economics)|preferences]].

Utility maximization is an important concept in consumer theory as it shows how consumers decide to allocate their income. Because consumers are modelled as being [[Rational choice theory|rational]], they seek to extract the most benefit for themselves. However, due to [[bounded rationality]] and other biases, consumers sometimes pick bundles that do not necessarily maximize their utility. The utility maximization bundle of the consumer is also not set and can change over time depending on their individual preferences of goods, price changes and increases or decreases in income.