Inferior Goods and Giffen Goods Inferior Goods and Giffen Goods which demand curve slopes downwards and upwards respectively. Inferior goods are close substitutes and Giffen […]
Substitution Effect A change in the relative prices of goods, make a rational consumer induce to substitute a relatively cheaper commodity for the dearer one. […]
Price Effect Price effect shows the total effect on consumer’s demand for a commodity due to change in the price of the same commodity, other […]
Consumer’s Equilibrium A consumer’s equilibrium is defined as a point where he maximized the level of his satisfaction, given his resources and another condition. At […]
The Law of Diminishing Marginal Rate of Substitution (MRS) Marginal Rate of Substitution is the rate at which units of two goods ate substituted each […]
Properties of Indifference Curve The main properties of indifference curves are explained below: 1. Indifference Curve Always Slopes Downward from Left to Right: This property […]
Indifference Curve The indifference curve is supposed to be a very important tool to analyze utility. They are used to represent an ordinal measurement of […]
Cardinal Approach of Utility The central theme of the consumption theory is the utility-maximizing behavior of the consumer. The specific questions that consumption theory seeks […]
Uses and Importance of Elasticity Some of the uses and importance of Elasticity are described below: 1. Product pricing: By evaluating the various degree of […]
Determinants Price Elasticity of Supply The main determinants/factors which determine the degree of price elasticity of supply are as under: (i) Time period. Time is […]
Determinants of Elasticity of Demand Determinants of Elasticity of Demand are discussed below: Income: The income of the consumer also affects the elasticity of demand. […]
Price Elasticity of Supply Law of supply shows the direction of change in quantity supplied of a commodity with the change in the price of […]
Cross Elasticity of Demand It is a measurement of responsiveness of quantity demanded of ‘x’ goods due to change in the price of ‘y’ goods. […]
Income Elasticity of Demand A measurement of responsiveness of quantity demanded due to a change in income of the commodity is called income elasticity of […]
The factor causing Shift in Supply Curve There are different factors causing a shift in the supply curve. Some of them are discussed below: Commodity […]
Movement along a Supply Curve and Shift in Supply Curve 1. Movement along a Supply Curve (Change in Quantity Supplied) A change in the quantity […]
Price Elasticity of Demand: A measurement of responsiveness of quantity demanded due to the change in the price of the commodity is called Price elasticity […]
Measurement of Elasticities Elasticity is a measure of a variable’s sensitivity to a change in another variable. In business and economics, elasticity refers to the […]
Consumer Equilibrium A consumer is said to behave reached his equilibrium position when he has maximized the level of his satisfaction, given his resources and […]
Law of Supply Law of supply states that other factors remaining constant, price and quantity supplied of a good are directly related to each other. […]
Factor Causing the shift in Demand Factor Causing the shift in demand is given in the table below:- Description Rightward shift in Demand Curve Leftward […]
Exceptions to Law of Demand Exceptions to Law of Demand are described below: 1. Giffen Goods: Giffen goods are the inferior goods whose demand increases […]
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