LAW OF DEMAND

According to law of demand if there is a increase in price of a good then there is a simultaneous decrease in demand.so price and quantity of demand is inversely proportional to each other.

Ex: The normal human behaviour is that if the price of sugar increases then the demand of sugar decreases there by decreasing the consumption.

                                LAW OF SUPPLY

Law of supply states that if there is a hike in price of a good then the quantity supply increases. In other words price and the quantity supplied are directly proportional to each other.in this scenario supplier have the great will to offer more and more product in the market to sell and gain more and more profit .

Ex: if the price of a life saving drug increases then the quantity supply also increases.

           OPPORTUNITY COST

The cost which we give up or sacrifices in order to get something having more value is called as opportunity cost. We have to choose such type of alternative from which we can get more benefit.

Ex:if I want to buy an earphone which is providing me benefit of 140 unit where as the other one providing me benefit of 180 unit. So the 140 unit which I give up in order to get the 180 unit of benefit is called as opportunity cost.

                        TASTE AND PREFERENCES

Demand od a good is fully dependent upon the taste and preferences of consumers. Further taste and preferences may vary  from person to person and group to group. Taste and preferences are time dependent. One consumer who is liking a particular product this year may not like the same on the very next year.

Ex: I was preferring jeans last year  but  now I am preferring formal pants .as time changes there may be a change in taste.

         PEOPLE FACE TRADE OFF

Every person face trade off in life . trade off occurs when there are many choices and you have to select only one among them . so trade off is nothing but the state of getting confused while choosing any product  and could not finalize which one to purchase and which one to not , which one to choose and which to not.

Ex: when buying a shirt in a mall people face trade-off due to presence of so many alternatives.