Law of demand
In law of demand price increases demand decreases. Late us take the vegetables prices if the price of vegetables increases people will buy less no of kgs of vegetables. If price drops people will buy more no of kgs of vegetables
Law of supply
In law of supply if price increases supply increases as well if price decreases supply decreases.
Let us take
an example we went to a trip there is only one restaurant in that location
there is increase in the tourist numbers in that place. Large no of tourists
will go to that restaurant so they automatically increase their prices and as
well as they will increase their supply
Marginal utility
I went to a
restaurant I have orderd one chiken tandoori full after having that I feel somewhere my stomach
is filled. Again I ordered half tandoori after having I felt that my stomach is
satisfied and I felt that I had enough stuff .The extra satisfaction which I
have got after having next half tandoori is marginal utility
Marginal rate of substitution
I want to go to a trip to ooty and coorg .I have given up the ooty trip for coorg trip.I went to coorg trip with the same level of utilization. Here I have substituted the ooty trip with coorg trip still I got the constant level of utility.this is known as marginal rate of substitution
People respond to incentives
There are two travels A and B .Travels A offering complementary lunch/dinner with the trip and travels B offer just a water bottle with the trip. People respond to complementary lunch/dinner offered by travels A.They will choose travels A to enjoy their trip .
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