Team Members:

Anirudh SharmaGhanshyam Patel

Kritika Tiwari Neel Shah

Radhika GuptaVishakha Shrivastava

Sankalp Shrivastava

Elasticity of Demand

TagHeuer is an expensive watch and comes under luxury product

We have related this concept to Elasticity of Demand

The degree to which demand for good or services varies with price and here in terms of luxury products demand will be more elastic

In Luxury Commodities Higher the income people will buy more and more of luxury goods.

Excess Supply(Surplus)

We have related this concept to Excess Supply(surplus)

In this article various airlines companies has reduced their flight charges

Quantity of good and services is beyond what is required by the user balance between supply and demand is not there.

Here supply is more than demand.

OLIGOPOLY

We have related this to OLIGOPOLY.

Oligopoly exists in imperfect market structure.

Oligopoly is a form of market in which a market or industry is dominated by small number of sellers.

Oligopoly reduces competition which lead to higher prices for consumers, With few sellers in the market each competitor is likely to be aware of the actions of others.

The decision of one company is influenced by the decisions of its competitors. So while making decisions a firm has to take into account the likely responses of the other market participants.

Negative Externalities

We have related this article to Network Externalities.

An externality occurs when the production or consumption of a product has an effect on a third party.

Although the externality that is generated can be positive, the externalities of consumption generated by smoking are all negative, and this is one of the biggest examples of a negative externality of consumption.

Substitiute Goods

Coca Cola Vs. Pepsi: The Cola Wars

Coca-Cola and Pepsi are the two most popular and widely

recognized beverage brands in the world.

For over a century Coke and Pepsi have been at each other's

throats in a constant struggle for a bigger piece of the billion-dollar

soda market.

Substitutes for one-other.

Law of Demand & Substitute Products

The substitution effect results from a change in demand

price, which affects relative prices given that the prices of

other goods remain unchanged, which induces buyers to

substitute the purchase of one good for another.

The change in relative prices then causes a change in

quantity demanded and a movement along the demand

curve.

Market Structure:Differentiated Oligopoly

An oligopoly is a market form in which

a market or industry is dominated by a small number of

sellers (oligopolists).

Oligopolies can result from various forms of collusion

which reduce competition and lead to higher prices for

consumers.

Band wagon effect

In these advertisements we have applied the concept of Bandwagon effect that is an exception to the law of demand.

Bandwagon effect is the tendency to do or believe things because other people do or believe other things.

In bandwagon effect people try to follow crowd.

Example branded company clothes .

Principal Agent Problem

We take this video from livingeconomics.org and it is related to principle agent problem.

The principal-agent problem there are two different entity. owner who wants to increase business revenue and worker who wants to increase their facilities.

In this video there is one lady who work in a company based on fixed salary. She knew if she work good or bad. she must got the salary.

When her boss is present She doing drama that she has a lots of work.

She is not submitted her assignment on a deadline. Her boss is worried about is.

How to solve it?

Her boss sited in front of her and tell to her how to do work. But for a long time of period that is not possible.

Now boss has a permanent solution of it. And tell her “how many more work you do, you get the bonus on it and you are a part of company.”