Law of demand
This means that when the price of the product goes up and the demand for
it reduces and vice versa. This law of demand is major dependent on price.
Example 1:
I recently visited a nearby market to buy some outfits for me. I usually
prefer for otto brand T-shirts, but I could see that the price of it was comparatively
high from the last time. Because of this I decided not to buy that brand and I switched
over to the next brand which was affordable to me. This explains how the demand
of the product reduced on increasing the price.
Example 2:
I have an Oppo F1S mobile which I bought 3months back. Initially when I was
thinking of getting this mobile the price was more which couldn’t afford, but
now the price has been reduced so that I can buy that product. This shows how
the reduction in the price actually impacts in the demand
Consumer surplus
This means that for each and every product the seller will be willing to
sell at some price and the buyer would have some wish to afford some price.
Example 1:
I bought a Bluetooth speakers last week and when I visited the shop, the
supplier was saying me the price of the product as 450. But I felt 450 for that
product was little more and I wanted to pay 400. Finally, the seller was convinced with my wish
of 400. Here the consumer surplus is Rs 50
Example 2:
Considering another example, this is an example that everyone of us would
have faced. I visited a footwear shop (not Branded) some normal/casual wears. The
price that was about to be supplied to me was 700 and I was bargaining with the
supplier so as to give it for 600 and finally both of us convinced with 650 and
again here Rs 50 is consumer surplus
Indifference curve
This curve means that the graph that is been plotted between two variant
products that a consumer is willing to buy and the likelihood of the consumers
of the product.
Example 1:
In the past few years am getting much fond of both clothing and footwear’s,
whenever I go out with my friends and I find some shops having of both of them.
By that time, I cannot get satisfied with any one of them, I will be in a dilemma
on choosing either of them. This situation is called indifference and if the
likelihood of my wish to buy the product is plotted in a graph then that is
called as indifference curve.
Example 2:
Considering some other situation of the same case we can have a food
section, I have been out there for the dinner this night. The more I wish to
have some specific dish and more am interested in having tasty food the equally
am interested in having deserts. So there is no comparison of which would I prefer
the most where the indifference occurs and when the graph is plotted called
indifference curve.
Opportunity cost
We can find many goods/products in the market of the same price but we
will select anyone among all. There are products that are left and that
situation is called opportunity cost.
Example 1:
We all would have visited a shopping market and all us would have crossed
chocolate section. There will be different segmentation on various prices. The we
will be selecting anyone and not all, say for example let me select 5star among
all of them. Now the opportunity for buying 5 star is more that of others. This
situation is called opportunity cost.
Example 2:
On considering another example of this opportunity cost, iam very much
fond of getting new pairs of footwear’s for every 6 months. When I go to
respective shops I will find many varieties of same price and obviously I will
select one and the rest remains unselected. This situation is called
opportunity cost.
Increase return to sales
This is a situation when the ratio of production is low when compared to
that of the sales.
Example 1:
There was a college fest during my graduation, where I got a chance of
having a food stall. There we were selling some 2 beverages and sandwiches. The
fest was for 3 days, the first day we prepared some 100 juices and 75
sandwiches. The day was done and all the sandwiches and juices were sold. In the
second day we increased the proportion but now this proportion was not
sufficient and for the day and we were supposed to prepare more than we
expected by the end of the day. Last day we increased the quantity furthermore,
this situation is called increase return to sales
Example 2:
Next i would like to go with some business related examples and let us consider a food business,the raw materials decide the amount of production done in a day. but the production done was insufficient for the market, then the next increase in the raw materials was done which was even not sufficient for the market. here the increase in the input is not sufficient for the output, this situation is called increase return to sales
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