ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -For example, if a consumer is hungry and buys a slice of pizza, the first slice will have the greatest benefit or utility. With each additional slice, the consumer becomes more satisfied, and utility declines. In theory, the first slice might fetch a higher price from the consumer.

Detailed explanation-2: -What is the law of supply and demand in economics? It is a core concept in economics that describes the relationship between producers and purchasers of a product or service. For example, sellers show interest in producing and supply more when the price is high and vice versa as price declines.

Detailed explanation-3: -An example of products with an elastic demand is consumer durables. These are items that are purchased infrequently, like a washing machine or an automobile, and can be postponed if price rises. For example, automobile rebates have been very successful in increasing automobile sales by reducing price.

Detailed explanation-4: -Unit elastic demand: For example, a product’s demand is unitary elastic if a 10% change in its price leads to a 10% change in the quantity customers desire. In this case, a price reduction might motivate customers to request more product units.