1) Demand & Law of Demand: - Demand can be defined as the willingness of a consumer to buy products at different price when All other things remain constant.
Law of Demand can be defined as the inverse relationship between quantity demanded and price at a given time or a specific time or the willingness of a buyer or seller to buy or sell his product at a given time ceteris paribus is called as law of demand.
For Example: - One day I was taking a walk down my house lane and I saw there was a new restaurant which had opened and I saw that there were very few customers there so I became curious and looked at the menu and I saw that the price at which they were offering food was very high, Then after a month I saw that restaurant again and I saw that people were not getting seats to sit in the restaurant and had to wait in line so again I became curious and I saw that they had reduced their prices and were offering combo meals also so the Quantity demand for their product rose very high.
2) Opportunity Cost: - The Cost of the next best alternative that we sacrifice to get the best outcome.
For Example: - There were three prospective locations for a mall –
Location A Offers 1000 net benefits units
Location B Offers 800 net benefit units
Location C Offers 850 net benefit units
So the Location That we choose will be that gives us the maximum net benefit units which will be Location A because it gives the maximum net benefit units and the next best alternative is Location C because after A C gives the max benefit units so the opportunity cost that we get is 1000 – 850 That is 150 net benefit units.
3) Supply: - Supply can be defined as the willingness and ability of producers to offer their products in the market for sale at various prices at a particular time.
For Example: - During the time of Durga puja people of Kolkata like me buy all kinds of products from the market and the producers take this opportunity to increase the price of their products because even if they increase their price the quantity supplied for their products does not decrease instead it increases, This is because consumers do not think of price when buying product at the time of any festival.
4) Production Function: - Maximum Output Q that a firm can produce for every specified combination of inputs.
For Example: - As the usage of skilled labour combined with technology is increased, the effect is expected to be higher output in service industries. In case of honour smart phones company they were able to produce good phones and so their sales were very low but when they increased the skilled labour and applied new technology their sales were very high and they were challenging top end smart phones and their market share.
5) People Respond To Incentives: - People are always looking for incentives and wherever there is incentives people respond to that. If people are not offered incentives they tend to shift to the place where incentives are being offered. Incentives can be both monetary or non monetary.
For Example: - Andhra restaurants are offering unlimited meals and this has become a major selling for them as because people saw incentive that for giving some amount of money they are getting to eat unlimited meals so they responded to the incentive and this is the reason that Andhra restaurants sales have increased.
No comments:
Post a Comment