The word economy comes from the greek word OIKONOMOS, which means “one who manages the household “. Economics is all about behavior and choice. Since it is about people’s behavior, it is very hard to predict. It is interaction among two groups of people or things.
There are two branches of economics:
A. Micro economics ( bottom - up)
B. Macro economics ( top - down)
PEOPLE FACE TRADE-OFFS :
Every customer has different choice and taste hence they react according to it. This is known as customer’s behavior. People decide what they want to buy and on what they are willing to invest money and time.
We resolve this trade off through COST BENEFIT ANALYSIS.
COST BENEFIT ANALYSIS:
Cost of something is what we give up to get that particular product or service.
Or
The sacrifice we do to achieve something is known as cost.
INCENTIVES:
An incentive is a reward. People respond to incentives. Every sale or purchase depends on incentives.
INCENTIVES WHICH ATTRACT BUYERS ARE AS FOLLOWS:
Price, quality, quantity, satisfaction, discount, service, brand, review, variety, location, income level, need, attractiveness, re-sale value, trends etc.
INCENTIVES WHICH ATTRACT SELLERS ARE AS FOLLOWS:
Profit, more sales, problem solving, goodwill, higher footfalls, product uniqueness, competition, interaction between buyer and seller, price etc.
PRICE is the main factor which drives buyers and sellers. QUANTITY is the second important factor.
INCENTIVE = PRICE: QUANTITY.
There are two branches of economics:
A. Micro economics ( bottom - up)
B. Macro economics ( top - down)
PEOPLE FACE TRADE-OFFS :
Every customer has different choice and taste hence they react according to it. This is known as customer’s behavior. People decide what they want to buy and on what they are willing to invest money and time.
We resolve this trade off through COST BENEFIT ANALYSIS.
COST BENEFIT ANALYSIS:
Cost of something is what we give up to get that particular product or service.
Or
The sacrifice we do to achieve something is known as cost.
INCENTIVES:
An incentive is a reward. People respond to incentives. Every sale or purchase depends on incentives.
INCENTIVES WHICH ATTRACT BUYERS ARE AS FOLLOWS:
Price, quality, quantity, satisfaction, discount, service, brand, review, variety, location, income level, need, attractiveness, re-sale value, trends etc.
INCENTIVES WHICH ATTRACT SELLERS ARE AS FOLLOWS:
Profit, more sales, problem solving, goodwill, higher footfalls, product uniqueness, competition, interaction between buyer and seller, price etc.
PRICE is the main factor which drives buyers and sellers. QUANTITY is the second important factor.
INCENTIVE = PRICE: QUANTITY.
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