Price Utility Theory

"Utility" is one of the most important foundations of modern economics. The utility theory (also be called consumer behavior theory) and the manufacturer's theory (also be called the behavior theory of manufacturer) constitute the core of microeconomics But the development of mainstream theory is in stagnation after revealed preference theory appeared. There's a severe disparity to the development of Theory of Firm. The issue whether utility can be calculated or not is still full of dispute. The dispute exists widely between the economists who hold "cardinal utility theory" and the economists who hold the "theory of ordinal utility ".This thesis is the criticism which is based on review about the origin the development of the utility theory, and try to build a new theory: Price utility theory .which has to raise a series of concepts from the new angle. The aim is to resolve the dispute completely, and make the utility theory become more practical. Finally, it will promote the development of consumer behavior theory.The concept of the utility in the thesis is that the utility is the discrepancy between the satisfaction and the payment. It can be described in this way: The utility = price on the mind - the price in the market. We can define utility unit as the price unit.The most important thought in this thesis is that we can see the effects of the price and surmise the price on the mind according to the behavior of the consumers, although we can not see the price in the consumers' head .In another angle, there's a max-price every consumer can offer .the surplus that the price on the mind subtract the max-price every can measure the utility excellently.We propose the true utility function and the specific idea about measure the utility based on the concept we build. The differences from the quondam theory are that the utility function in quondam theory is a pure form without specific meaning .But the function in the theory of ordinal utility is some kind of series without specific meaning .the utility function in price utility theory can get the exact answer under some conditions .the answer is stand for the max utility .we can even get the marginal utility figure about some commodity .the traditional theory need the assumption that everyone is reasonable ,but, we need not .In fact ,some behavior of the consumer may be irrational.The dispute which began hundred years ago can be over with the appearance of the price utility theory .the utility can be amounted exactly, and we can compare it in deferent situations. The demand curve, the supply curve, price and utility can get along well to each other. Then; the utility theory can explain the world well. The difficulty in Arrow Impossible Law can be removed .besides, there's expectation in the price utility theory which can make it more persuasive.