...The Important Concepts and Effects of A Commodity Price Change In The Malaysia Market A commodity is a raw material or primary agricultural product that can be bought and sold without qualitative differentiation across a market, such as gold or wheat. A Commodity also maintains a close universal price regardless of who produces it. The main commodities such as aluminium, cocoa, coffee, copper, corn, copper, cotton crude oil, lead, heating oil, gold, lean hogs, live cattle, natural gas, nickel, platinum, palm oil, soybeans oil, soybean, silver, sugar, tin, unleaded gas, wheat and zinc. Economic recovery will make food, metals and other raw materials more expensive in 2011, the head of the World Trade Organization said on Monday. Addressing a United Nations conference, WTO Director-General Pascal Lamy said the prices of crude oil, copper, gold, corn and soybeans would be rises most this year, with less pronounced increases in natural gas, zinc and cattle. Besides that, Frenchman said "2011 will see the prices of most commodities rise, as the rise in global GDP bolsters demand, led by emerging economies”, estimating worldwide economic output would increase 4 percent in 2011. Over 70 percent of the growth will come from commodity-intensive emerging markets. China, India and Latin America, in particular, will be acting as a 'pull' for global commodities. That’s means rising commodity prices could be a boon for countries where raw materials are grown, mined, produced and refined...
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...|A Report on | |Elasticity and Related Problems | |A Report on | |Elasticity and Related Problems | Course Title: Microeconomics Course Code: F – 106 Submitted To: Lubna Rahman Lecturer Department of Finance University of Dhaka Submitted By: |Serial No. | | | |Name | | | |ID No. | | | | | | | |01. | | | |Md. Tanvir Ahmed Chy ...
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...as the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management. The underlying idea of all these definitions is that managerial economics means economics applied in decision-making. So we may consider managerial economics as a special branch of economics bridging the gap between abstract theory and managerial practice. It may be pointed out here that effective decision-making at the firms’ level calls for a careful analysis of a choice between alternative courses of action. Economic theory offers a variety of concepts and analytical tools which can be of considerable assistance to the manager in his decision-making process. In fact actual problem-solving may require many skills and tools which are not available in the traditional economist’s. For example, knowledge of accounting and of statistical concepts and methods, which are not taught in economics, can help the analyses to apply more effectively the economic tools in a concrete situation. The problems of industrial management do not neatly fall into one academic discipline or another. Rather they tend to out across different disciplines. Managerial economics is pragmatic, it is concerned with analytical tools that are useful, that have proven themselves in practice, or that promise to improve decision – making in the future. In the attempt...
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...673 635 409 School of Distance Education UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION Study Material COMPLEMENTARY COURSE I SEMESTER B.COM/BBA Managerial Economics Prepared by: Module I, II, V(A) : Sri. M.V. Praveen, Asst. Professor, Dept. of Commerce, Govt. College Madappally. Module III, IV & V (B) : Sri. Vineesh A.K., Assistant Professor, Department of Commerce, Govt. College, Madappally. Dr.K.Venugopalan, Associate Professor, Department of Commerce, Govt. College, Madappally. © Reserved Edited & scrutinized by : Managerial Economics-I Sem.B.Com/BBA 2 School of Distance Education CONTENTS MODULE PARTICULARS PAGE NO. 5 12 33 42 1 II III IV INTRODUCTION DEMAND CONCEPTS PRODUCTION MARKET STRUCTURES AND PRICE OUTPUT DETERMINATION PRICING POLICY AND PRACTICES BUSINESS CYCLE V (A) V (B) 60 66 Managerial Economics-I Sem.B.Com/BBA 3 School of Distance Education Managerial Economics-I Sem.B.Com/BBA 4 School of Distance Education MODULE I INTRODUCTION Introduction The term “economics” has been derived from a Greek Word “Oikonomia” which means „household‟. Economics is a social science. It is called „social‟ because it studies mankind of society. It deals with aspects of human behavior. It is called science since it studies social problems from a scientific point of view. The development of economics as a growing science can be traced back in the writings of Greek philosophers like Plato and Aristotle...
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...673 635 409 School of Distance Education UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION Study Material COMPLEMENTARY COURSE I SEMESTER B.COM/BBA Managerial Economics Prepared by: Module I, II, V(A) : Sri. M.V. Praveen, Asst. Professor, Dept. of Commerce, Govt. College Madappally. Module III, IV & V (B) : Sri. Vineesh A.K., Assistant Professor, Department of Commerce, Govt. College, Madappally. Dr.K.Venugopalan, Associate Professor, Department of Commerce, Govt. College, Madappally. © Reserved Edited & scrutinized by : Managerial Economics-I Sem.B.Com/BBA 2 School of Distance Education CONTENTS MODULE PARTICULARS PAGE NO. 5 12 33 42 1 II III IV INTRODUCTION DEMAND CONCEPTS PRODUCTION MARKET STRUCTURES AND PRICE OUTPUT DETERMINATION PRICING POLICY AND PRACTICES BUSINESS CYCLE V (A) V (B) 60 66 Managerial Economics-I Sem.B.Com/BBA 3 School of Distance Education Managerial Economics-I Sem.B.Com/BBA 4 School of Distance Education MODULE I INTRODUCTION Introduction The term “economics” has been derived from a Greek Word “Oikonomia” which means „household‟. Economics is a social science. It is called „social‟ because it studies mankind of society. It deals with aspects of human behavior. It is called science since it studies social problems from a scientific point of view. The development of economics as a growing science can be traced back in the writings of Greek philosophers like Plato and Aristotle...
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...Supply vs Demand Abstract Supply and demand are two important concepts in a marketplace. These concepts are dynamic and vary from market to market. The objective of this paper is to compare and contrast the supply and demand concepts based on available scholar material. The comparison involves reviewing the literature material under the definitions of demand and supply; the relationship between supply and demand; the effect of supply and demand on the market; and the factors affecting demand and supply in the United States of America. The review uses book materials in economics including the classical economics. Definition of demand and supply The demand in economics is defined as the quantity of a good or service that consumers are willing and able to purchase at a given price during a given period of time, (Richard Ely, 1919). In economics, demand is greater than a desire to purchase. Richard argues that a beggar, for instance, may desire a good house, but due to lack of money to pay for the house, the demand becomes ineffective. Such a demand has no purchasing power. Thus, demand in a market is dependent on desire, affordability and willingness to purchase. Supply is defined as the number of goods and services that the seller is willing to sell at a given price, (Richard Ely, 1919). Richard clearly states that supply is seller-centered. Like the demand concept, supply depends on the availability of goods, the price of the goods and the willingness of the seller to sell...
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...Unit 1 Concepts of Managerial Economics Learning Outcome After going through this unit, you will be able to: • • • • Explain succinctly the meaning and definition of managerial economics Elucidate on the characteristics and scope of managerial economics Describe the techniques of managerial economics Explain the application of managerial economics in various aspects of decision making • Explicate the application of managerial economics in marginal analysis and optimisation Time Required to Complete the unit 1. 2. 1st Reading: It will need 3 Hrs for reading a unit 2nd Reading with understanding: It will need 4 Hrs for reading and understanding a unit 3. 4. 5. Self Assessment: It will need 3 Hrs for reading and understanding a unit Assignment: It will need 2 Hrs for completing an assignment Revision and Further Reading: It is a continuous process Content Map 1.1 1.2 Introduction Concept of Managerial Economics 1.2.1 Meaning of Managerial Economics 1.2.2 Definitions of Managerial Economics Managerial Economics 1 1.2.3 Characteristics of Managerial Economics 1.2.4 Scope of Managerial Economics 1.2.5 Why Managers Need to Know Economics? 1.3 1.4 Techniques of Managerial Economics Managerial Economics - Its application in Marginal Analysis and Optimisation 1.4.1 1.4.2 1.5 1.6 1.7 Application of Managerial Economics Tools of Decision Science and Managerial Economics Summary Self Assessment Test Further Reading 2 Managerial Economics 1.1 Introduction ...
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...and Managerial Decision Making” The demand of a commodity depends on the size of the total market or industry demand for the commodity which in turn is the sum of demands for the commodity of the individual consumers in the market. The demand for a commodity arises from the consumers’ willingness and ability to purchase the commodity. Consumer Demand Theory postulates that the quantity demanded of a commodity is a function of the price of the commodity, the consumers’ income, the price of the complementary and substitute commodities and the taste of the consumer. It is also expressed as: Qdx=f(Px, I, Py, T) Where Qdx = Quantity demanded of the commodity X by an individual per time period Px = Price per unity of commodity Y I = Consumer income Py = Price of substitute or complementary commodity T = Consumer taste When the firm increases the price of a commodity, sales generally decline. A manager expects an inverse relationship between the quantity demanded of a commodity and its price. On the other hand, when a consumer’s income rises, he/ she usually purchases more of most commodities, known as normal goods. There are some goods and services, however, which the consumer purchases less as income increases, which are termed as inferior goods. The inverse relationship between the price and the quantity demanded of the commodity per time period is the individual’s demand schedule for the commodity, and the plot of data gives the corresponding individual’s...
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...Demand Definition of 'Law Of Demand' Law of demand states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa Meaning It is the amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demand for a good or service is determined by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key determinants of the market price. Concept of demand Demand for product implies: a) Desires to acquire it, b) Willingness to pay for it, and c) Ability to pay for it. All three must be checked to identify and establish demand. For example : A poor man’s desires to stay in a five-star hotel room and his willingness to pay rent for that room is not ‘demand’, because he lacks the necessary purchasing power; so it is merely his wishful thinking. Similarly, a miser’s desire for and his ability to pay for a car is not ‘demand’, because he does not have the necessary willingness to pay for a car. One may also come across a well-established person who processes both the willingness and the ability to pay for higher education. But...
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...demand implies “extension” or “contraction” of demand. When with a fall in price more of a commodity is bought there is an extension of demand. Similarly, when a lesser quantity is demanded with a rise in price there is a contraction of demand. In short demand extends when the price falls and it contracts when the price rises. Both of the terms are technically used in stating the law of demand. Question 3. :-Opportunity cost / alternative cost? Answer:-It is measure in terms of the forgone benefits from the next best alternatives use of a given resources in simple words scarifies or loss of alternative use of a given resource is turn as an opportunity cost. The alternative or opportunity cost of one unit of product A is the amount of product B that has been sacrificed by allocating the resources to produce A rather than B. Question 4. :-Low of Demand? Answer:-According to Ceteris Paribus, “The higher the price of the commodity the smaller is the quantity demanded and lover the price larger the quantity demanded other things remain constant.” In other words the demand for a commodity extends (i.e., the demand rises) as the price falls and contracts (i.e., demands falls) as the price rises. Or briefly stated, the low of demand stresses that, other thing remaining unchanged, demand varies inversely with the price. Question 5. :-Social Accounting? Answer:-The concept of social accounting is introduced by J.R....
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...Elasticity of Demand Concepts and Measurement In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. Demand elasticity is important because it helps firms model the potential change in demand due to changes in price of the good, the effect of changes in prices of other goods and many other important market factors. A firm grasp of demand elasticity helps to guide firms toward more optimal competitive behavior. Rate at which demand changes due to particular change of price of the commodity or price of other commodity or income of the consumer is called elasticity of demand. Elasticities greater than one are called "elastic," elasticities less than one are "inelastic", and elasticities equal to one are "unit elastic". Elasticities equal to infinity is called "perfectly elastic demand". Also elasticities equal to zero is called "perfectly inelastic demand". Demand elasticity is a measure of how much the quantity demanded will change if another factor changes. One example is the price elasticity of demand; this measures how the quantity demanded changes with price. This is important for setting prices so as to maximize profit. When price elasticity of demand is elastic, the firm should lower prices, since it will result in a big uptick in demand, increasing your total revenue. When price elasticity of demand is inelastic, the firm should increase prices because there will be only a...
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...NATIONAL OPEN UNIVERSITY OF NIGERIA COURSE CODE : BHM 303 COURSE TITLE: MANAGERIAL ECONOMICS 1 MANAGERIAL ECONOMICS (THE COURSE GUIDE) THE NEED Managerial Economics as a course required for effective resource management was put in place due to the following developments in the global business environment: (a) Growing complexity of business decision-making processes. (b) Increasing need for the use of economic logic, concept, theories, and tools of economic analysis in the process of decision-making. (c) Rapid increases in the demand for professionally trained managerial manpower. These developments have made it necessary that every manager aspiring for good leadership and achievement of organizational objectives be equipped with relevant economic principles and applications. Unfortunately, a gap has been observed in this respect among today’s managers. It is therefore the aim of this course to bridge such gap. THE COURSE OBJECTIVES On completion of the requirements of this course, students and managers alike will be expected to: 1. Understand the relative importance of Managerial Economics; 2. Know how the application of the principles of managerial economics can aid in the achievement of business objectives; 3. Understand the modern managerial decision rules and optimization techniques; 4. Be equipped with tools necessary in the analysis of consumer behaviours, as well as in forecasting product demand; 5. Be equipped with the tools for analyzing production and costs;...
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...is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand. The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more Like the law of demand, the law of supply demonstrates the quantities that will be sold at a certain price. But unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers...
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...Supply and Prices in the Housing Industry F. Hill ECO/365 Principles of Microeconomics July 30, 2014 Mr. Keith Watts Abstract The slowdown in the housing market in the US has been accompanied by a sharp fall in house prices and a glut of homes for sale in the market. While the idea that this high number of dwellings for sale should place downward pressure on house prices is intuitive, little empirical work has been done in this area to assess the factors affecting house prices. This paper explicitly models the relationship between changes in prices of houses and various measures of housing demand and supply. A simulation model has been included to help explain the evolution of the housing market and enable one determine the equilibrium price, quantity and prices. The company under consideration is GoodLife management- a property management company that manages seven communities in the city of Atlantis. Keywords: Housing market, supply and demand, price elasticity and economics. Introduction From the demand and supply curve of the firm, various microeconomics and macroeconomics can be identified. Microeconomics looks at the behaviors of individual people and companies within an economy. It is based on the idea of a market economy, in which forces of demand and supply are behind prices and production levels of goods and services. Microeconomics is concerned with supply and demand in individual markets, individual consumer behavior and individual labor markets. Macroeconomics...
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...Executive summary Advertisement campaign in relation to neoclassical theory of consumer, understanding what consumer behavior in terms of their wants and needs, not forgetting their personality, attitude, perception, is not only important to marketers whose main goal is to make profit but also to the government and its various regulatory agencies and the whole society. Such a theory is usually based on a consumer image as one of the highest rational decision maker that widely seeks to maximize customer satisfaction by way of providing an informed and reasoned analysis of utility and value. The consumer behavior is known to create strong assumptions which are based on both computational and informational bases of consumer theory. Contents 1.0 Description of the advertisement 3 2.0 Market Group 4 3.0 Problem recognition 5 4.0 Neoclassical consumer theory 6 5.0 Application of neoclassical theory of consumer 8 6.0 Conclusion 9 7.0 Work cited 10 Consumer Behavior 1.0 Description of the advertisement The advertising campaign is for an airline company QANTAS that has its base in Australia. It has a picture of a young girl having fun while watching a movie using the toy movie machine. The airline is targeting plane travelers by promising to offer the best flight entertainment. This according to the airline will be able to have them enjoy their journey through entertainment and not be able to realize how long the journey is. The airline...
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