Easy economics for students

17/06/2022

Concept of utility:
Utility means the want satisfying power of the commodity. In economics the meaning of utility is the pleasure or the satisfaction that a person derives from their economic activity. Hence, the property of the commodity that satisfies the consumer is called the utility.
For example: the satisfaction that we get after drinking water is the utility. Utility is the measure of the welfare or the satisfaction. In this discipline, the term satisfaction and the utility are alternatively used in place of another. Hence, to which extent or degree our unlimited wants and needs are getting fulfilled by consuming the available goods and services is the utility.
According to P.A. Samuelson and W.D. Nordhaus “Utility is a scientific construct that economists use to understand how rational consumer divide their limited resources among the commodities that provide them with satisfaction.”

19/03/2022

Desire simply refers to the mere wish of a person to have a particular commodity. Demand refers to a desire backed by the ability and willingness to pay for a particular commodity.

10/01/2022

A small note on perfect competition:
Perfect competition is a market structure where there are large number of buyers and sellers buying and selling a homogeneous product and uniform price. This market is characterized by the free entry and exit of the firm in the industry and perfect mobility of factors of production . There is no governmental intervention in the market . The most important thing that must be taken into consideration while studying about perfect competition is the market is the price giver i.e. price of the product is determined by the market demand and market supply and it is given to the firm. The firm cannot change its price i.e. price of the product is constant. Because of this reason the average revenue marginal revenue and the price are equal and these curve coincide with each other . And the total revenue increases at constant rate.
The major characteristics of this market are as follows..

1) Large number of buyers and sellers: The number of buyers and sellers are so high that a individual firm or the customer only cannot influence the price .
2) free entry and exit: The firm in the perfect competition can freely enter and exit from the market . If the firm are making profit then new firm can enter into the market but if the existing firm earn losses then they can exit from the industry .
3) No governmental intervention : There is no any governmental intervention in the market regarding the pricing and decision making policy.
4) Perfect mobility of factors of production: there is perfect mobility of factors of production in perfect competition market. Capital labour raw materials can be easily transefferd from one place to another place without any intervention.
5) Price taker: the firm in the industry is the price taker because the price of the product is determined by the market demand and market supply and is given to the firm.
6) Profit maximization objective: The objective of firm under this market is to maximize profit.❤️

10/01/2022

Law of demand❤️. Comment for any other topics of your need.😊

06/01/2022

MRS😊

01/11/2021