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The relative responsiveness of a supply or a demand curve in respect to price is referred as elasticity. If the curve is more elastic then it means the more quantity will be changed in respect to price change.
“A consumer is in equilibrium when he regards his actual behaviour as the best possible under the circumstances feels no urge to change his behaviour as long as circumstances remain unchanged”.
utility is value-in- use of a commodity. Utility is the derivative of consumption which implies subjective satisfaction. Simply, ‘utility’ describes consumer preferences according to modern theory of consumer behaviour.
The demand refers to a consumer’s willingness for such quantity of goods and services and ability to pay for same at various prices dealing within a period of time. In economics, demand is something more than desire to purchase. For example, if any person is feeling hunger but he does not have money to pay for it, in that case his demand is ineffective. Effective demand involves three things Desire,
Means to purchase, and Willingness to use those means for that purchase.
1.Opportunity Cost Principle
The sacrifice of alternative courses of action for any decision is referred to as opportunity cost. Opportunity cost may be defined as, ‘the revenue foregone or opportunity lost by not using the resources in second best alternative use’. It is also called imputed cost. Measurement of sacrifice is done by opportunity cost. The sacrifice which is made for taking a decision is measured by opportunity cost. This concept can be explained by following points.
Here we will discuss the top 7 importance of managerial economics or you can say the significance of managerial economics in a business or as an organization. If you want to perform better then you need to understand managerial economics. Let’s start and read till to end. Managerial economics uses economic theory and analysis in business…
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