They are faced with the problem of scarcity. They do not have enough income to be able to purchase all the goods or services that they would like. So they have to allocate their resources to achieve their objective. Rational consumers would spend on goods that will give the highest utility. Individuals would spend money on things that give them the most benefit. For example, they would spend money for their holidays to France rather than paying for a holiday for a handicapped person they do not know.
Workers: Workers want to maximise their own welfare at work relative to the human cost of working in a particular job. It is known that the most desirable reward for workers is the level of wages. However, other factors are also desirable. Payment can come in the form of fringe benefits, like the workers in Disney Land can play any Roller coasters they want for free or beauty advisors at Marie France can have a free losing weight course.
Firms: The objectives of firms are often mixed, such as becoming monopoly and becoming multinational company etc. However, in most cases, the firms are known to maximise the difference between total revenue and total costs i.e. profits. This is because, the firms are owned by private individuals who want to maximise their return on ownership.
Governments: Governments have traditionally been assumed to want to maximise the welfare of the citizens of their country. However, there is a limited government intervention in the market. .
In the price mechanism, the forces of demand, representing consumers, and supply representing producers, determine the value of prices of goods. The demand curve has a negative gradient, as there is an inverse relationship between price and quantity demanded. This shows that the consumers would like to maximise their utilities while minimising the price they have to pay. In the other hand, the supply curve has a positive gradient, due to a direct relationship between price and quantity demanded.