Demand - Consumers desire , ability and will to purchase goods at various price.
Supply - Willingness and ability of the producer to offer the goods in the market for sale at a various price.
How people make DECISIONS:-
1> People face trade off
2> The cost of something is what you give up to get it
3> Rational people think at the margin
4> People respond to incentives
5> Trade can make everyone better off
6> Markets are usually a good way to organize economic activity
7> Governments can sometimes improve market outcome
8> A country’s standard of living depends on its ability to produce goods and services
9> Price rise when the government prints too much money
10> Society faces a short run trade off between inflation and unemployment.
These above points are considered when a customer or consumer make decision to purchase any goods .
Lets talk about “ The cost of something is what you give up to get it” :-
Suppose you decided to watch a movie with your friends for 3 hours. So keep in mind what else you can do in that 3 hours to earn some money. You can work in some coffee shop for that 3hrs or make a painting which you can sell or give some chargeable services to someone. It is called opportunity cost.
Supply - Willingness and ability of the producer to offer the goods in the market for sale at a various price.
How people make DECISIONS:-
1> People face trade off
2> The cost of something is what you give up to get it
3> Rational people think at the margin
4> People respond to incentives
5> Trade can make everyone better off
6> Markets are usually a good way to organize economic activity
7> Governments can sometimes improve market outcome
8> A country’s standard of living depends on its ability to produce goods and services
9> Price rise when the government prints too much money
10> Society faces a short run trade off between inflation and unemployment.
These above points are considered when a customer or consumer make decision to purchase any goods .
Lets talk about “ The cost of something is what you give up to get it” :-
Suppose you decided to watch a movie with your friends for 3 hours. So keep in mind what else you can do in that 3 hours to earn some money. You can work in some coffee shop for that 3hrs or make a painting which you can sell or give some chargeable services to someone. It is called opportunity cost.
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