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 quantity posited is Q1 at legal injury P1 . At point C , the quantity purchased is Q3 at value P3 . Q3 is greater than Q1 overdue to impairment miscellanea P1-P3 . If the turn out doest has this kind of a slope then the easily is not a normal one and it might be a giffen , Veblen good . The demand relationshipELASTICITY CURVES br In elastic demand , a slight win over in price leads to big change in quantity demanded . This graph shows the amount by which Quantity Q changes due to a change in price given by. The negative slope shows that price and quantity are indirectly related . An increase in one leads to a simplification of the other A slight 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 low reduction /increase in quantity A slight change in price results in a high change in quantity supplied The curve highly sloped due to the effect that a small change in price has on the quantity demanded . Quantity demanded is highly sensitive 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 believe in a commodity /service became other hoi polloi in the market do . This relates to what other are interested in . its is very common with youths where people follow crowds . Desire is refractory by what other consumers believe is good .

In commonplace language , a bandwagon is a facility that contains the band in an entertainment scene . People want 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 purchasing the akin . With the bandwagon application , the demand and supply theory is disrupted . purchasing decision is determined by costs and preferenceBandwagons effect nooky 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 class 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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