The consumer is the backbone of any economy. They are the ones who utilize the goods and services produced within the economy and ensure that the system continues to function efficiently. Every economic system is dependent on demand and supply, and consumers are the ones directly responsible for this. Generally, the term consumer refers to an individual alone. However, consumers can mean more than that. It could mean a class of individuals or even institutions in certain instances.
The categories of consumers have changed with our development as humans. At a time, all consumers were direct consumers who produce for their consumption, making them both producers and consumers as well. Later on, with the development of an exchange system which started with trade by barter – consumers began to exchange products and services for money and other things acceptable at the time. Today, modern consumers only need to exchange money for the goods and services they want.
The role of a consumer in any economy are numerous and could include the fact that they are the primary source of demand in any economy. Since the demand determines production and has the largest influence on the market, consumers can engender diversification of any economic system.
As a consumer, there are certain things you need to know to make great financial decisions. Unfortunately, many consumers do not possess the crucial information necessary for every decision, and the result is that they make financial decisions with long term consequences. This ignorance can be only corrected through consumer education which ensures that the people have the necessary information. This information helps them to make well-thought decisions and also make the producers of goods and services accountable.
Consumer education, sometimes, comes from the producers themselves who provide this information to guide consumers on their products and also to improve their services through feedbacks on such products.