Situation 1- To analysts,Indian industy will be able to take advantage through offering products at low price.
Concept- Law of Demand
MEANING- Demand is the Desire and ability of the consumer to purchase goods at various prices. Quantity Demanded means the actual amount of goods desired at a certain price.
Law of demand means, When price of the commodity increases Quantity Of Demand decreases.
EXAMPLE- I went to buy Chocos of Kellogs company, earlier it was Rs.250
This time,I saw it was increased to Rs.280. I witched to other company having lesser price.
Here we can see that, as soon as the price of the comodity increased, demand Automatically decreased.
Situation 2 - Many star hotels routinely offer unlimited buffet meals.
Concept- People Return to Incentives
MEANING- Some Rational People make decisions according to cost and there benefits, people need things that are having low cost with high benefits. They respond to incentives.
EXAMPLE - As a regular customer, I went to purchase Maggi packets, I saw there was an increase in the price by Rs.5. Then i decided not to buy it this time as the price was high.
Here, the Maggi producer decide to hire more workers and made more maggi packets.
Here,the higher price in the market of maggie provides an incentive for me to consume less and an incentive for sellers to produce more.
Situation 7- supply curves for live sports events
Concept- Supply Concept
MEANING- Suppy means when producer is willing and desired to produce goods at various price.
Quantity Supply means the actual amount of goods that the sellers are willing and able to sell at Certain price.
Supply concept says that,when Price increases, Quantity of supply also increases.
EXAMPLE- I went to have Petrol, and I saw the price increased to 0.20 /liter and the supply is constant. That means here,the supplier have to Increase the quantity of supply according to the Increase in price.
SITUATION 8 - Three prospective locations for a large retail outlet- Location 'A' offers 750 net benefit units, location 'B' offers 900 net benefit units and location 'C' offers 850 net benefit units.
Concept- Opportunity Cost
MEANING - Opportunity Cost means when we sacrifice any valuable thing for another valuable thing.
Example - When i was working in a company for 2 years, i decided to switch to study PGDM. Job and PGDM both were equally important for me,but i had to sacrifice my job in order to add one more qualification to my career. This is called opportunity cost where you give up to get the other item.
Situation 9 - increase usage of combination of skilled labour and technology is believed to result in increase output in manufacturing industries.
Concept- Increase Return To Scale
Meaning- In a production process,when inputs are doubled,then,one of the thing happens that is Increase Return to scale. Which means,
When Output increases more than the increase in the input proportionately.
Example- I joined gym before 3 months, I thought of being regular, but i was unable to continue, after 3 months i checked my weight, i was surprised that it was reduced to 10kgs.
Here,we can see that Output of my weight increased more than the input that i was unable to come to gym.
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