DEMAND AND SUPPLY
MEANING OF DEMAND:-
Demand in economics means both the willingness as well as the ability to purchase a commodity by paying a price and also its actual purchase . Generally , demand for a commodity depends upon the price of commodity . When price of particular commodity goes up , its demand falls and vice-versa.
EXAMPLES:
- I am willing and able to buy 'TITAN' watches when it was on offer only and at that time sudden demand of TITAN watches increases but if the offer ends demand of particular watches get decreases and vice-versa.
- I am generally used to buy "ORIFLAME" day and night creams but when its price sudden hicks I won't buy it and looking for some other day and night creams also.
MEANING OF SUPPLY:-
Supply is defined as quantity of a commodity offered by the producers or suppliers to be supplied at a particular price and at a certain time.
EXAMPLES:
- I went to buy grocery products from one grocery shop which is nearer to my home . So I remembered that time when 'MAGGI' noddles was banned than sudden the demand for 'YIPPEE' noddles would increases and that customers who buy maggi were want yippee more . According to this supply of yippee noodles were increased.
- Supply of 'LIGHTNING AND DECORATION' products were always increases at the time of DIWALI . So supply of product would increases or decreases according to the demand of product at a certain time.
PRICE ELASTICITY / INELASTICITY OF DEMAND
PRICE ELASTICITY:-
Price elasticity is defined as the degree of responsiveness of quantity demanded of a commodity due to change in its price when other factors remaining constant. Price elasticity of demand is usually measured by following formula-
Price elasticity of demand = % change in quantity demanded / % change in price
EXAMPLES:
- Quantity demanded of 'MOBILE' phones would get increases in FLIPKART when its price would get down due to sale/offer period .
- When price of movie tickets get low for a particular day in a week , quantity demanded of tickets would get higher due to reduction in its price.
PRICE INELASTICITY OF DEMAND:-
Price inelasticity of demand is defined as quantity demanded of a certain commodity would not get changed due to change in its price.
EXAMPLES:
- When price of 'MAGGI' increases from ₹10 to ₹12 it demands would not change according to change in its price.
- Price of 'APPLE' i-phones increases or decreases it will doesn't affect the quantity demanded of the product.
UTILITY
Meaning of utility:-
Utility or usefulness is the ability of something to satisfy needs or wants . Utility is satisfaction or benefit that an individual gains from consuming a given amount of goods or services . Usually, the more the person consumes, the larger his or her total utility will be.
EXAMPLES
- I want to eat CHOCOLATE (dairy milk oreo) which is favourite of mine, when I start eating it my utility increases more and more of eating it but at some point of time my utility decreases due to more consumption of chocolate.
- Tatasky services are very good as we all know it. For the first time when I receive a service from it I felt good and I want more services by it but after some point of time my utility to used the benefit of tatasky would decreases.
PRODUCTION FUNCTION
Meaning of production function-
Production function expresses the relationship between the amount of input required and the amount of output that can be obtained is called production function. A production function is mathematical expression to relationship between the quantities of input employed and the quantity of output produce.
EXAMPLES:
- The output of 'RESULTS' depends on learning, understanding and studying . Hence the relationship between factor input(learning, understanding and studying) and the output(results) can be shown with the help of production function,
- I want to take admission in top 'B-SCHOOLS', so here my input is CAT, MAT, XAT and the output is get admitted in top B-schools. Output totally depends on input .
CONSUMER SURPLUS
Meaning of consumer surplus-
Consumer surplus is the excess satisfaction that a consumer can enjoy from the purchase of a thing when the price that he actually pays is less than the price he was willing to pay for it.
EXAMPLES:
- Generally I went to go BIG BAZAAR for shopping there I pay ₹60 for 100kg of corn flakes but when I go to D-MART I actually paid ₹40 for the same . So here I willing to pay ₹60 but actually paid ₹40 , ₹20 is consumer surplus for me.
- I want to buy a book for reading and I am willing to pay ₹320 for it but in AMAZON KINDLE I actually paid ₹200 for the same .
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