1) CPED - The Cross Price Elastic Demand measures how the quantity demanded of one good responds to a change in the price of another good. It is calculated as the percentage change in quantity demanded of good 1 divided by the percentage change in the price of good 2. Whether the cross price elastic demand is a Positive or negative number depends on whether the two goods are substitutes or complements.
Example 1)- Jio and Airtel sim - In these 2 companies CPED is common. Since both are used together . When Airtel resulted in hiked prices in calling , internet etc the demand for Jio sim automatically got increase due to its good quality and better schemes which they offered in less price.
Example 2 )- Nokia and samsung phones - CPED is also common in these 2 companies as the demand for samsung company phones increased earlier as compare to Nokia due to its android features. Earlier prices of Nokia phones were really high but now it has decreased to a certain level due to its less demand.
2) The demand Curve : Relation Between Price and quantity - The quantity demanded of any good is the amount of the goods that the buyers are willing and able to purchase. Or when the price of a good rises, the quantity demanded of the goods falls and when the price falls the quantity demanded rises.
Example 1) - ola and uber - With reference to these we can say if the price of any of these 2 are low then that will be preferred as compare to the latter one former one will be in more demand.
Example 2)- Myntra online shopping - In Myntra we usually do not purchase the things in offseason due to hiked prices we wait for the end of the reason sale so that prices decrease and the demand increase.
3) LAW of Diminishing Marginal Utility - Its states that the more you consume the particular product in the given time more the level of satisfaction decreases.
Example 1)- Maruti 800 and Maruti Alto 800 - In these two cars as the time went the marginal utility of Maruti 800 got slowly diminished the level of satisfaction got decreased and Maruti came up with Alto 800 as a modified car.
Example 2) - Whatsapp Video Calling Feature - Earlier in whatsapp there was no facility for the video call and that's why somewhere its marginal utility got decreased but after getting the video facility its life span automatically got increased.
4) People Face Trade off - Its simply means what the customer is willing to buy and what the customer actually buys. It is actually what to buy , what not to buy. and we resolve the Trade off by cost benefit analysis.
Example 1) - When you go to a restaurant and find 2 delicious food for 200 and 400 rupees and you got to know 200 has 10 pieces of chicken and 400 has 5 pieces so depending upon your hunger you will definately choose 200 rupee plate therefore you have done the cost benefit analysis here.
Example 2 )- When you recharge your mobile you firstly check the Jio , Airtel or vodafone or any other companies offer and then decide which one to choose for getting better signal, network, internet , calling facility hence again you are doing the cost benefit analysis in which you want to get best things in optimum amount of price .
5) Types of utility :
a) Cardinal Utility - It is the utility which can be quantifies or countable.
Example 1)- Imagine you went for a movie after watching the movie you were asked the review so you will give 3 out of 5 or 4 out 5 i.e it is countable.
b) Ordinal utility - It is generally associated with the ranks or ranking.
Example 2 ) - When we rank top 10 Engineering College
When we rank top 10 MBA college
When we rank top 10 action movies
When we rank top 10 Hollywood Songs etc.
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