--%>
Assignment Help - homework help

Explain of the law of demand

Explain of the law of demand?

E

Expert

Verified

a. Diminishing marginal utility:  The decrease in added satisfaction that results as one consumes additional units of a good or service, i.e., the second “Big Mac” yields less extra satisfaction (or utility) than the first.

b. Income effect: A lower price increases the purchasing power of money income enabling the consumer to buy more at lower price (or less at a higher price).

c. Substitution effect: A lower price gives an incentive to substitute the lower-priced good for now relatively higher-priced goods.

   Related Questions in Business Economics

  • Q : Illustrate the term Economic Rationale

    Illustrate the term Economic Rationale?

    		•
  • Q : Managerial Economics Managerial

    Managerial Economics Meaning and definition Managerial economics general refer to the integration of economy th

    		•
  • Q : Laissez-faire philosophy of government

    As per to the laissez-faire philosophy of government,: (1) economy works best while all investment decisions are centralized. (2) market system works best along with only minimal government intervention. (3) government must be restricted to stabilizin

    		•
  • Q : New firms entry in industry What

    What persuades new firms to enter in an industry? Answer: Abnormal profit encourages new firms to enter an industry. 

    		•
  • Q : Explain about the principle of

    Economic efficiency needs that, relative to the other goods which different individuals might consume, the people who value exact goods relatively the most should own and/or use all goods. Such principle is termed as: (i) economic equity. (ii) allocat

    		•
  • Q : Discuss the economic aspects of ticket

    Discuss the economic aspects of ticket scalping also identifying the gainers and losers?

    		•
  • Q : Technological advances in producing

    When given resources can now produce additional goods than was previously probable, then there have been a: (1) Stock market boom. (2) Competitive spurt which shrinks entrepreneurial gain. (3) Concavity reversal in the production possibilities frontier. (4) Bigger rel

    		•
  • Q : Determine opportunity costs while

    Marrying the one you love involves opportunity costs, mainly since: (i) being married limits your freedom to marry someone else, and you should also consider making someone else happy while making decisions which affect both of you. (ii) two can live

    		•
  • Q : Define Dependent and independent

    Define Dependent and independent variables?

    		•
  • Q : When are transaction costs to ultimate

    Transaction costs to ultimate consumers are reduced if: (w) consumers travel long distances to buy directly from manufacturers quite than buying the goods at local retail stores. (x) intermediaries generate income while conveying goods from manufactur

    		•