5 Different concepts in economics

Law of diminishing marginal utility:

The addition satification derivied from the consumption of additional unit of product is known as marginal utility

Examples:

1.When I consume one cup of tea my level of satisfaction  is more and after consuming the same cup of tea again my level of satisfaction will decrease

2.When I ride my bike for fist time I will get more satisfaction .and when I ride daily I will less satisfaction compared with the first ride

Demand:

 Consumer desire, ability and will to purchase goods at various prices is known as demand

Examples:

1.If I went to a store to buy a watch which is already fixed but I`m not willing to pay the same amount of money

2.The moment when I want to buy an second hand bike .the money which spent to buy that bike quiet low because of its less demand

SUPPLY:

Willingness and ability of the producers to offer the goods in the market for sale at various prices

Cross price elasticity of demand:

It measures the responsiveness of the quantity demanded for a good to change in price of another good

Examples:

1.When iphone releases its new product and they generally   decrease  the production of previous iphones therefore the price also falls down

2.The price of  ice creams decreases  in the winter beacause the quantity demand of an ice creams in the winter season is very less

Substitutes:

 The good which can be used instead of an another good is known as substitute goods

Examples:

1.I will  prefer to Pepsi when there is no Coca-Cola

2.when the price of hero bikes increases all  will generally prefer to buy honda bikes