Micro economics concepts

Diminishing marginal utility-
Example:- Ajay everyday goes to grocery store to have maggie, everyday having maggie will lead to decrease in level of satisfaction which Ajay gets and at one point it will diminish as in it will be ove

Rational people think at margin-
Example:- Vijay goes to buy a brand new television in a showroom, so he will look at all the features and the technology used. He will look at benefits he will derive from buying the television.

Law of Demand-
Example:- usually college students go to grocery shop to Harsha, suppose the price of one maggie is rs.10, if Harsha decides to raise the price to rs.12 then the amount of units sold will decrease which means demand is decreased and when price is decreased to rs.8 then the demand will increase.

Elasticity- The proportionate responsiveness of a second variable to an initial proportionate change in the first variable
Example:- when the price of sugar increases the demand for tea decreases because customers usually buy both sugar and tea together and as the price for sugar increases, demand decreases which also affects the demand for tea.

Trade off-
Example:- Daniel goes to a shop to buy one kg of rice, he usually visits that shop and he always buys a chocolate which is his favourite, but now he has to buy rice so he sacrifices chocolate as rice is his necessity.