More DetailsDemandIt is the quantity of goods and services which consumers want and are able to purchase at a particular price. As we know demand for a commodity changes. For example if the price were to go up it is likely that the demand will reduce. So demand is inversely related to the price of a commodity. An... |
More DetailsComparative AdvantageComparative Advantage is the ability of an entity, for example a firm or even a country, to produce wealth by doing what they do best. The production of these goods and services will benifit the entity. By focusing on such goods and services the entity is able to trade the surplus for... |
More DetailsIntroductionEconomics is a social science. It starts with the assumption that human beings will work towards fullfilling their self interest. The study of modern economics was first started by Adam Smith who examined the reasons for some nations prospering while others not being able to do so... |
More DetailsIntroduction to CompetitionIt is believed that competition between firms selling the same products and services will lead to the consumer getting the best price. So competition is struggle between firms to win the patronage of the consumer. |
More DetailsInelastic SupplyWhen the supply for a commodity doesn't change with a change in its price we call it perfectly inelastic supply. |
More DetailsIntroduction to UtilityGoods and services vary in their usefulness for the purpose they are required to fulfill. Utility is a measure of this usefulness. |
More DetailsCases where Law of Demand does not workNecessary goods: A minimum quantity of such goods has to be purchased as they are necessary and one cannot do without them. Examples of such goods are salt and sugar. Habits of the consumer: Certain goods like cigarrettes and tea can become habits of a consumer. So the consumer will... |
More DetailsExpansion of demandThis is when the demand of a commodity expands with a fall in its price. During expansion in demand the prime factor causing the expansion is the fall in price of the commodity. |
More DetailsIncrease in demandThis is when the demand of a commodity increases due to factors other than its price. The prime factors responsible for an increase in demand are an increase in the demand of substitute goods or a decrease in price of complimentary goods. Complimentary goods being goods which would lead to the... |
More DetailsDecrease in demandThis is when the demand of a commodity decreases due to factors other than its price. The prime factors responsible for adecrease in demand are a decrease in the demand of substitute goods or an increase in price of complimentary goods. Complimentary goods being goods which would lead to the... |
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