Law of demand :- As we all know that demand is indirectly related with price. So if any brand offer any product at lower price than automatically the demand of that product will rise .
Example :- If any indian brand offers mobile phone at cheaper price than automatically the demand of that product will increase and the demand for other brands will fall.
People react to incentives :- It is the situation when people choose that product when they get more marginal utility.
Example :- If a person have to choose between same product with different brand with other one having discounts and extra services than obviously a rational person will choose the discounted one .
Rational people think at the margin :- People always choose that product where they get more satisfaction at that same price .
Example :- Suppose a person gone for shopping, in SHOP 1 he is getting a combo of a sunglass , tshirt , wallet and in SHOP 2 he is getting a combo of the same mentioned above with a extra of denim in the same price , than majority of the population will choose the SHOP 2 .
Law of diminishing marginal utility :- When a person consumes another unite of a particular commodity than the utility of the product will decrease.
Example :- If a consumer will consume a commodity for more than one time than the utility will be diminished as compared to the 1st time .
Opportunity cost :- The Cost of something is what you give up to get it .
Example :- If any indian brand offers mobile phone at cheaper price than automatically the demand of that product will increase and the demand for other brands will fall.
People react to incentives :- It is the situation when people choose that product when they get more marginal utility.
Example :- If a person have to choose between same product with different brand with other one having discounts and extra services than obviously a rational person will choose the discounted one .
Rational people think at the margin :- People always choose that product where they get more satisfaction at that same price .
Example :- Suppose a person gone for shopping, in SHOP 1 he is getting a combo of a sunglass , tshirt , wallet and in SHOP 2 he is getting a combo of the same mentioned above with a extra of denim in the same price , than majority of the population will choose the SHOP 2 .
Example :- If a consumer will consume a commodity for more than one time than the utility will be diminished as compared to the 1st time .
Opportunity cost :- The Cost of something is what you give up to get it .
Example :- Example if you want to buy an iPhone so for that you are savitng money for last 7 months. So you are sacrificing many luxury for purchasing an iPhone.
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