Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The demand curve
Suppose that starting from a condition of equilibrium, the price of X falls relative to Y. We now have a condition where the utility from the last shilling spent on X will be greater than the utility from the last shillings spent on Y. Mathematically this can be written as:
In order to restore the equilibrium the consumer will buy more of X (and less of Y), thus reducing the marginal utility of X. The consumer will continue substituting X for Y until equilibrium is achieved. Thus we have attained the normal demand relationship that, ceteris paribus, as the price of X falls, more of it is bought. We have therefore a normal downward-sloping demand curve. The demand curve we have derived is the individuals' demand curve for a product. The market demand curve can be then obtained by aggregating all the individual demand curves.
The explanation we have obtained here is of the price (or substitution) effect.
Measures to control inflation An inflationary situation can effectively be addressed/tackled if the cause is first and foremost identified. Governments have basically three
how realistic is the sales maximisation model
distinguish between industry demand and firm demand..
Explain the role scarcity of resources plays in economics decision making
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
Explain how a product would reach equilibrium position with the help of -iso-quants and iso-cost curve.
Theory of consumer behaviour The role of customers in an economy is of significant importance because consumers spend most of their incomes on services and goods produced by fi
Goverment Banker, Fiscal Agent and Adviser Central banks in all countries acts as the fiscal agent, banker and adviser on all important financial matters to government of thei
A cut in price from Br 1.50 to Br 1.20 leads demand for a product rise by 10% What would the price elastic of demand before this product ? interpret the result by identifying the t
How can a firm''s security policies contribute and relate to the six main business objectives.give example
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd