1)Relationship. with demand and Income:
3)Substitute goods: An increase in price of an good decreases then, the demand for another product increases. example:- If the price of an item mutton increases then the people will go with the substitute called chicken.In this way demand for chicken will be increases.
Complementary goods:An increase in price of one product leads to decrease in demand for its complement product also.
example:-Increasing price of Jam leads to decreasing the demand for bread.
2)Law of equi-marginal utility theory:
Human wants are unlimited but the resources are limited.The consumer/Human tries to distribute his limited income among his various needs.He tries to get the maximum satisfaction from whatever the income he spent, this concept is called equi-marginal utility theory.
Here consumer tries to get all the satisfaction from whatever he is consuming.
example:- For example a person is earning 5000 a month then he things to settle all the expenses whichever is he having for that month in those 5000 only and aslo he tries to save some portion of money also for future.If he meets the above criteria then, the consumer is said to have satisfaction from that 5000 consuming.
3)Law of supply: (Ability to produce, need to produce and willing to produce/sell)
The law of supply concept is directly related to producers/sellers point of view.
If the price of a particular good/services increases or high then the quantity supplied of the product goes high.Simultaneously if the price of good decreases, quantity demanded for product decreases.
5)Law of diminishing marginal utility theory:
Diminishing marginal utility theory is nothing but when we add upon the additional unit after enough consumption of goods then the satisfaction level will continue to decrease from point to point.(Consumption of additional product to product)
Here the interest on consuming will decline from consuming products to products.
If the income of an individual increases then the purchasing power of an individual increases then,the demand for the product increases.(simultaneously) Income relationship with goods: 1)Normal goods:If the income increases, then the demand for the products increases example:- If a persons salary increases from 25000-35000, then the purchasing power increases so that demand for that increases. 2)Inferior goods: Even though the income of individual increases,the demand for products dont increase.
3)Substitute goods: An increase in price of an good decreases then, the demand for another product increases. example:- If the price of an item mutton increases then the people will go with the substitute called chicken.In this way demand for chicken will be increases.
Complementary goods:An increase in price of one product leads to decrease in demand for its complement product also.
example:-Increasing price of Jam leads to decreasing the demand for bread.
2)Law of equi-marginal utility theory:
Human wants are unlimited but the resources are limited.The consumer/Human tries to distribute his limited income among his various needs.He tries to get the maximum satisfaction from whatever the income he spent, this concept is called equi-marginal utility theory.
Here consumer tries to get all the satisfaction from whatever he is consuming.
example:- For example a person is earning 5000 a month then he things to settle all the expenses whichever is he having for that month in those 5000 only and aslo he tries to save some portion of money also for future.If he meets the above criteria then, the consumer is said to have satisfaction from that 5000 consuming.
3)Law of supply: (Ability to produce, need to produce and willing to produce/sell)
The law of supply concept is directly related to producers/sellers point of view.
If the price of a particular good/services increases or high then the quantity supplied of the product goes high.Simultaneously if the price of good decreases, quantity demanded for product decreases.
- example:-As we can take the example of rice, as the price of rice is increasing day by day as supply for the product is also increasing because the rice is the essential eatable item for human mankind.Even though price increases its supply wont gets effected.
- People will be using Air conditioner in summer season so that the producers will be producing the goods in winter season due to demand will be high in consumption in summer irrespective of price rise.
4)consumer equilibirium:
Consumer equilibirium is nothing but a point where the supply and demand curves intersect at a point that point is called equilibrium market
At equilibrium point the price that consumer is willing to pay and also ability to pay and also the producer willing to pay and ability to produce .Here the buyer satisfies for the amount he is spending for the product and aslo seller ready to sell at the same price in which he is not going to effect loss.- example:-In the last summer season when i went to buy garments ie, shoes the seller told the price Rs-2000 i started bargaining from 2000 to 1500 finally i was satisfied with the amount of money which i spent and also the seller was satisfied that he got profit from that good.Here the 1300 is the point of equilibrium market.
5)Law of diminishing marginal utility theory:
Diminishing marginal utility theory is nothing but when we add upon the additional unit after enough consumption of goods then the satisfaction level will continue to decrease from point to point.(Consumption of additional product to product)
Here the interest on consuming will decline from consuming products to products.
- example:-Iam very much found of eating sweet gualab jamun, as i went to shop and bought 10 jamuns as i started to eat iam very much exited as i consumed 2-3 sweets iam very happy in consuming till i reached 4 sweets after consumption iam not exited as 1st sweet and now came of 6 sweets iam exhausted and lost willingness to eat and stoped eating.This is diminishing marginal utility theory.
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