Friday, July 20, 2018

Non price determinants

When we go to buy a cloth i liked or i loved a certain colour but how many are willing to pay extra price for that cloth?
We can pay extra to watch a movie.There are some factors for which we can pay extra.

Non price determinants of supply:

-cost of production
-profitability of alternative product
-profitability of goods in joint supply
- nature and other random shocks
-aims of product
-expectation of product
- seasonality
-informative asymmetry
- when non price determinants range we decrease the supply.

Eg: when price is same and production and selling of goods is more suddenly the workers asked to increase their salary.you have to increase production and supply.

Eg: There were many indian tv set before but once the foreign company came and introduced new technology and that too in low price indian company can't compete.their supplies decreases.

Eg: when you have lots of rain,certain strike and you are not able to make goods supply decrease.

Eg: if i am expecting the price to increase my behaviour will be different,i am expecting to price to decrease my behaviour will be different.

Information assymetry: economics  assume there is no such things. Buyer and seller have same access to information because market are efficient but in practice seller have certain access to info but buyers don't have that might change the concept.
- sellers have more information about the product than buyer .

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