1.Law of Diminishing Marginal Utility:-
It states that the more of a good
or service that one obtains in a specific period of time,the less the
additional utility derived from an additional unit of the good or service.
Example-
Circus artists/performers
performing in multiple cities/events.If the performer or the artist performs
repeatedly in a particular area for n number of times then the marginal utility
of the audience watching the shows and event will decrease,because audience will
get bored of watching the event or show again and again.
2.Increasing returns to Scale:-
Output increases more than
proportionality with an increase in the inputs increasing returns to scale.
Example: - When the usage of still labor is combined with technology, by doing so the input increases then there is an increase in the production output. Hence both are increasing proportionally.
3.People respond to incentives:-
Incentives that induces a person to act. It states that different people have different incentive. It plays a central role in the study of economics.
Example: - Offering unlimited meals has become a major selling for many Andra restaurants, etc. When people hear about unlimited meal they get lured and find it to be the best option. Therefore, incentives are the statements are made to attract and convenience customers.
4.Law of supply:-
It states that the quantity supplied of a good rises when the price of the good rises and vice versa, The other things being cetris paribus.
Example: - Lots of unseasonal price fluctuation happen in vegetables due to the non price determinants of supply. When the price of the unseasonal vegetables is high, selling of the vegetable is profitable and so the quantity supplied of the vegetables is large. We also see that there is a rise in demand of unseasonal vegetables which fluctuates the price mechanism.
5.People face trade-offs:-
Trade off is a situational decision for reducing or forgoing one or more desirable outcomes in exchange for something more desirable. It is kind of dilemma faced or a compromise done while choosing something.
Example: - Some hotels offer diverse menu both depth and breath, this is the situation were the customer undergoes trade off to make decision and has to reduce its desirable dish or item for something more desirable and yummy for his tummy. Whereas the hotels which provide very few items on there menu makes the customer easy to choose without any kind of trade-off.
Example: - When the usage of still labor is combined with technology, by doing so the input increases then there is an increase in the production output. Hence both are increasing proportionally.
3.People respond to incentives:-
Incentives that induces a person to act. It states that different people have different incentive. It plays a central role in the study of economics.
Example: - Offering unlimited meals has become a major selling for many Andra restaurants, etc. When people hear about unlimited meal they get lured and find it to be the best option. Therefore, incentives are the statements are made to attract and convenience customers.
4.Law of supply:-
It states that the quantity supplied of a good rises when the price of the good rises and vice versa, The other things being cetris paribus.
Example: - Lots of unseasonal price fluctuation happen in vegetables due to the non price determinants of supply. When the price of the unseasonal vegetables is high, selling of the vegetable is profitable and so the quantity supplied of the vegetables is large. We also see that there is a rise in demand of unseasonal vegetables which fluctuates the price mechanism.
5.People face trade-offs:-
Trade off is a situational decision for reducing or forgoing one or more desirable outcomes in exchange for something more desirable. It is kind of dilemma faced or a compromise done while choosing something.
Example: - Some hotels offer diverse menu both depth and breath, this is the situation were the customer undergoes trade off to make decision and has to reduce its desirable dish or item for something more desirable and yummy for his tummy. Whereas the hotels which provide very few items on there menu makes the customer easy to choose without any kind of trade-off.
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