ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Supply and Demand Prices and rates change as supply or demand changes. If something is in demand and supply begins to shrink, prices will rise. If supply increases beyond current demand, prices will fall. If supply is relatively stable, prices can fluctuate higher and lower as demand increases or decreases.

Detailed explanation-2: -As the price increases, the incentive for producing more goods increases, thereby increasing the producer surplus. Description: A producer always tries to increase his producer surplus by trying to sell more and more at higher prices.

Detailed explanation-3: -The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.

Detailed explanation-4: -Product Cost. The Utility and Demand. The extent of Competition in the market. Government and Legal Regulations. Pricing Objectives. Marketing Methods used.