ECONOMIC CONCEPTS:
1. LAW OF DIMINISHING MARGINAL UTILITY:
Bawarchi biryani sometimes provides unlimited buffet. Because, as per law of diminishing marginal utility as we consume more the marginal utility will decrease. So they provide unlimited buffet. Because, they know that as the consumers consume more the marginal utility will decrease for them.
2. LAW OF DEMAND:
They generally won't increase their price. Because as per law of demand, if price increases demand decreases and if price decreases demand increases. So if they increase price the demand will decrease.
3. ECONOMIES OF SCOPE:
Economies of scope occurs when products share common inputs and diversification leads to cost savings. Here in Bawarchi biryani same cook prepares different kinds of dishes with same equipment. This leads to cost savings.
4. PEOPLE RESPOND TO INCENTIVES:
Sometimes bawarchi biryani provides discounts and combo offers. Because, people respond to incentives. So if they provide discounts and combo offers like biryani plus coke at a price of biryani then people buy more than before.
5. MONOPOLISTIC COMPETITION:
In monopolistic competition there will be no entry barriers. So, anyone can enter into the market. The number of firms operating monopolistic competition is more in case of restaurants. So anyone can start the business of restaurants.
1. LAW OF DIMINISHING MARGINAL UTILITY:
Bawarchi biryani sometimes provides unlimited buffet. Because, as per law of diminishing marginal utility as we consume more the marginal utility will decrease. So they provide unlimited buffet. Because, they know that as the consumers consume more the marginal utility will decrease for them.
2. LAW OF DEMAND:
They generally won't increase their price. Because as per law of demand, if price increases demand decreases and if price decreases demand increases. So if they increase price the demand will decrease.
3. ECONOMIES OF SCOPE:
Economies of scope occurs when products share common inputs and diversification leads to cost savings. Here in Bawarchi biryani same cook prepares different kinds of dishes with same equipment. This leads to cost savings.
4. PEOPLE RESPOND TO INCENTIVES:
Sometimes bawarchi biryani provides discounts and combo offers. Because, people respond to incentives. So if they provide discounts and combo offers like biryani plus coke at a price of biryani then people buy more than before.
5. MONOPOLISTIC COMPETITION:
In monopolistic competition there will be no entry barriers. So, anyone can enter into the market. The number of firms operating monopolistic competition is more in case of restaurants. So anyone can start the business of restaurants.
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