CONCEPTS OF ECONOMICS

We usually see that restaurants like barbeque nation, they provide unlimited food for fixed amount of price. Because of the word unlimited, people get attracted to that. Hence this concept is referred to PEOPLE RESPOND TO INCENTIVES.  Incentive is something that which induces a person to act.

Now a days people we see tourists are more interested in visiting beaches when compared to religious places as their destination spot. This concept is referred to principle of DIMINISHING MARGINAL UTILITY, if they visit the religious place, their additional utility derived from that is less. Because of this marginal utility gets diminishes as per the people who wish to visit beaches.

As per the law of demand if price of a good decreases, its demand increase. if price gets reduced more customers will come to buy that good, therefore the demand increases.

When I go big bazar I see that there is one plus one offer, I buy that good because I am getting two goods for same price. As the price decreases, the demand for that product increases.

If you participate in a fashion show, suppose you won. you get lots of fame and you become a celebrity in a short period of time. Apart from winning awards you get extra benefits. This concept is referred to PEOPLE RESPOND TO INCENTIVES.

You see price fluctuations in case of fruits, this is because SUPPLY and DEMAND of fruits. Suppose in a festival season, fruits prices get increased because of demand. And also in the case like natural effects, heavy rains, supply of fruits is less so demand is high.