What is the nature of commodity, Managerial Economics

Assignment Help:

Q. What is the Nature of Commodity ?

The nature of a commodity as well has an effect on the price elasticity of its demand. Commodities can be characterised ascomforts, luxuries and necessities, on the basis of their nature. Demand for luxury goods (for example luxury cars, decorative items etc.) are more elastic than demand for other kinds of goods as consumption of luxury goods can be set aside or delayed when their prices increase. In contrast, consumption of necessary goods, (for example clothes, sugar, vegetables etc.) can't be delayed and for this reason their demand is inelastic. Demand for comforts is generally more elastic than necessities and less elastic than the demand for luxuries. Commodities can also be categorised as durable goods and perishable or non-durable goods. Demand for durable goods is more elastic than non-durable goods, as when prices of the former rises, people either get old one fixed in place of substituting it or buy 'second hand' goods.


Related Discussions:- What is the nature of commodity

Describe about the theory of profit, Describe about the Theory of profit ...

Describe about the Theory of profit Every industrial and business enterprise aims at maximising profit. Profit is the difference between total economic cost and totalrevenue. P

Explain the demand analysis - managerial economics, Demand analysis Dem...

Demand analysis Demand analysis is undertaken to forecast demand, which is a fundamental constituent in managerial decision-making. Demand forecasting is of important because a

Classification of taxes, CLASSIFICATION OF TAXES Taxes can be classifi...

CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a.     Impact of the taxes It means on whom the tax is imposed.   On the other hand, incidence of the

Permanent income hypothesis, What is the Permanent Income Hypothesis? What ...

What is the Permanent Income Hypothesis? What is the theory's potential relevance for assessing the effects of temporary tax cuts for the purpose of fiscal stimulus? If you were

Special drawing rights, Special Drawing Rights (SDR) These are interna...

Special Drawing Rights (SDR) These are international reserve currencies created by the International Monetary Fund  (IMF) to overcome the problems of using gold and national c

Substitution effect on law of demand, Substitution Effect on law of demand ...

Substitution Effect on law of demand When price of a commodity falls it becomes comparatively cheaper if price of all other related goods, particularly of substitutes, remain c

MBA, different types of markets and role in managerial economics

different types of markets and role in managerial economics

Expected utility, (Only for extra credit) Consider Freddy on a rainy Thursd...

(Only for extra credit) Consider Freddy on a rainy Thursday afternoon after losing in his favorite video game. His friend Tommy comes over to cheer him up and offers him the follow

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd