As my previous blog stated how companies use concepts of economics in their dealing, this time i'll be explaining my situations where economics came into play.
Lets start with:
LAW OF DEMAND
Higher price of good then lesser is the Quantity demanded and vice versa,in a defined time period.
Example: Petrol price, i used to drive 9 km to my college in Jaipur. Now whenever there is a hike in price i opt for pooling with someone or using public transport.Here when petrol price increases demand of petrol decreases. And when a low price is estimated ,we can see a long queue in front of petrol pumps.
UTILITY
Satisfaction derived from consumption activity.
Example: Mango season, the summer season. Satisfaction derived from the season's first mango tasted is utility to me.
LAW OF DIMINISHING MARGINAL UTILITY
As consumption increases the marginal utility derived from every additional unit keeps on declining.
Example: Now i will derive utility from that season's first mango. But as i start consuming more of mangoes the utility derived from each additional mango consumed will keep on diminishing i.e. Satisfaction will be less comparative to the first mango consumed.
OPPORTUNITY COST
In simple words, opportunity lost is opportunity cost.
Example: In IBA post lunch mess is closed on saturdays. The most buzzed restaurants, lets take two (i) Vaishnavi (ii) NH209
Now in vaishnavi a biryani will cost Rs.250 and in NH209 it will cost Rs.150.
Here from the choices NH209 is considered more of a valuable alternative choice .
It is important to note that opportunity cost is not only focused on monetary value but also time, pleasure, ambience etc.
LAW OF SUPPLY
Higher price of good results in higher quantity supplied.
Example: Cafe coffee day is the nearest hangout place from IBA, here the price of coffee is higher i.e. Rs.150 per cup. Still a number of customer including myself is attracted towards that high rated coffee.
Lets start with:
LAW OF DEMAND
Higher price of good then lesser is the Quantity demanded and vice versa,in a defined time period.
Example: Petrol price, i used to drive 9 km to my college in Jaipur. Now whenever there is a hike in price i opt for pooling with someone or using public transport.Here when petrol price increases demand of petrol decreases. And when a low price is estimated ,we can see a long queue in front of petrol pumps.
UTILITY
Satisfaction derived from consumption activity.
Example: Mango season, the summer season. Satisfaction derived from the season's first mango tasted is utility to me.
LAW OF DIMINISHING MARGINAL UTILITY
As consumption increases the marginal utility derived from every additional unit keeps on declining.
Example: Now i will derive utility from that season's first mango. But as i start consuming more of mangoes the utility derived from each additional mango consumed will keep on diminishing i.e. Satisfaction will be less comparative to the first mango consumed.
OPPORTUNITY COST
In simple words, opportunity lost is opportunity cost.
Example: In IBA post lunch mess is closed on saturdays. The most buzzed restaurants, lets take two (i) Vaishnavi (ii) NH209
Now in vaishnavi a biryani will cost Rs.250 and in NH209 it will cost Rs.150.
Here from the choices NH209 is considered more of a valuable alternative choice .
It is important to note that opportunity cost is not only focused on monetary value but also time, pleasure, ambience etc.
LAW OF SUPPLY
Higher price of good results in higher quantity supplied.
Example: Cafe coffee day is the nearest hangout place from IBA, here the price of coffee is higher i.e. Rs.150 per cup. Still a number of customer including myself is attracted towards that high rated coffee.
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