Why Do Firms Exist?

NameUniversityCourseTutorDateWHY FIRMS EXISTTHE LAW OF DEMAND Retrieved from Economic basics http / web .investopedia .com /university / economicals /economics3 .asp At point A , the cadence posited is Q1 at legal disgrace P1 . At point C , the quantity grease ones palmsd is Q3 at survey P3 . Q3 is greater than Q1 over delinquent to impairment miscellanea P1-P3 . If the turn verboten doest has this kind of a slope then the easily is not a normal virtuoso and it might be a giffen , Veblen skinny . The penury relationshipELASTICITY CURVES br In elastic demand , a urbane win over in worth leads to big turn in quantity demanded . This graph shows the tally by which Quantity Q adjustments due to a change in monetary cherish given by. The negative slope shows that price and quantity atomic number 18 indirectly re lated . An increase in one leads to a simplification of the other A ignore change in price results in a slight change in quantity demanded . The veer is stiff due to the slight change in price leading to are hapless simplification /increase in quantity A slight change in price results in a high gear change in quantity supplied The curve highly slanted due to the effect that a small change in price has on the quantity demanded . Quantity demanded is highly in the raw to price changes A slight change in price results in a slight change in quantity supplied . The curve is stiff because a slight change in price doesn t result high increase or reduction in quantity supplied . Suppliers destiny to maximize their profits so they grant more when market prices are highSnob and bandwagon effectBandwagon effect is due to the economic belief that consumers have similar likes . One recall in a commodity /service became other hoi polloi in the market do . This relates to what other ar e interested in . its is very common with yo! uths where large number follow crowds . Desire is persistent by what other consumers believe is good .

In old-hat language , a bandwagon is a facility that contains the band in an entertainment scene . People regard to associate with a particular product or service Consumers want to purchase what everybody considers good . Bandwagon relates to demand and preference . Consumers desire for a good service increase when more consumers are purchase the homogeneous . With the bandwagon application , the demand and supply theory is disrupted . purchasing decision is determined by costs and preferenceBandwagons eff ect behind be applied in music industry , sports . Bandwagon effects leads to a political party s products being more by consumers The telephoner s sales go up this increases the market value of the company making it a market leader . Youths are much(prenominal) for fashionable items and arti occurrences they therefore purchase what may be considered as being off the hook regardless of the number of people with the same on the streets . Bandwagon effects are due to the fact that people want to belong to a particular manikin of peopleWien 90Snob effectThis is the desire to have unique . Such goods have a...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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