Substitution effect on law of demand, Managerial Economics

Assignment Help:

Substitution Effect on law of demand

When price of a commodity falls it becomes comparatively cheaper if price of all other related goods, particularly of substitutes, remain constant. Or we can say substitute goods become comparatively costlier. Because consumers substitute cheaper goods for costlier ones, demand for comparativelycheaper commodity increases. The increase in demand on account of this factor is called substitution effect.


Related Discussions:- Substitution effect on law of demand

Price elasticity at terminal points, Price Elasticity at Terminal Points ...

Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined

Stock market, find out the characterstics of national stock exchange

find out the characterstics of national stock exchange

How pollution can make the market equilibrium inefficient, In regards to ai...

In regards to air pollution, use a diagram to show and explain how the existence of pollution can make the market equilibrium inefficient.

Write internal and external factors of business operation, Internal and Ex...

Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m

Transfer payments, Transfer Payments Are any payments made to househol...

Transfer Payments Are any payments made to households by the government that are not made in return for the services of factors of production i.e. there is no Quid pro Quo.  S

Elasticity.., elasticity concepts occupies a central place in policy formul...

elasticity concepts occupies a central place in policy formulation explain in details

Problems in using arc elasticity, The use of arc elasticity in economic ana...

The use of arc elasticity in economic analysis involves a good deal of chariness since it is capable of being misinterpreted. Arc elasticity coefficients vary between the same two

Leading economic indicators, Leading Economic Indicators The 11 ke...

Leading Economic Indicators The 11 key economic indicators that have been establish to lead business cycle turning points. Of the 11, four are basically used in business;

What is the profit maximising ticket price, A promoter decides to rent an a...

A promoter decides to rent an arena for concert. Arena seats 20,000. Rental fee is 10,000. (This is a fixed cost.) The arena owner gets concessions and parking and pays all other e

Types of budgets, TYPES OF BUDGETS 1.     Deficit budget   If th...

TYPES OF BUDGETS 1.     Deficit budget   If the proposed expenditure is greater than the planned revenue from taxation and miscellaneous receipts, this is a budget defic

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd