People face trade off:
This means what customer will buy and what not the customer will buy. If the customer is not satisfied with the product and excersing the choice which result in future trade off.
Example : letd take example of going shopping with women as they are shopping freak. If you take a girl or women for shoping they will be experiencing lots of items in the shop or malls but in the end they will end up buying nothing which results in trade off.
Another example we take about a boy in sports shop for buying bat. As boys are generally attracted twords cricket as in a process of selecting bat they will see many bats but they will find some or the other problem with the bat which result in trade off.
Incentive buyer : Firm and company compensate with the incentive. The incentive may be monetary or non monetary
Example : as consumer or supplier wants to enjoy the incentive as we mostly see in the malls when discount are there buy 1 get 1 type of discount people resond effectively .
In a firm where a group of people are working for achieving a target they also get incentive for achieving a target which is monetary incentive.
Law of demand
As price increases demand of the product decreases
For example : as there was painting going in my house but i stopped the painting because of the price of paint was high, one day price of paints decreases and then i completed the paint in my house.
Another example : As my daughter love to have chocolate, i use to give her 1 chocolate everyday but when the price decreases i started giving her two chochalates.
Law of supply : from supplier point of view the price increases demand also increase for the profitability.
Example : As price of furniture increases the supplier try to sell more and more furniture because of the probability.
Another example : when price of shoes increases for profit the shopkeeper attract customer by doing branding its done for earning more profit.
Non determinants of supply :
1. Cost of production : if the cost of production increase then price will rise and supplier will also try to sell more.
2. Profitability goods in joint : if price of milk increase then price of milk related product will also increase.
3. Aim of producer : more and more share market the shopkeeper can gain then they can give ling service to the customer.
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Friday, August 10, 2018
Trade off, incentive buyer, law of demand, law of supply, non determinants of supply
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