Notes for DEMAND ANALYSIS & ELASTICITY OF DEMAND

[Projectstransfer]

Submitted by Nitin Mohan gupta

[bonddonraj]

nice buddy g8 work

[roshcrazy]

........good notes.......thnx for uploading....!!

[tinns]

Originally Posted by Projectstransfer

Submitted by Nitin Mohan gupta

hi good notes .... thanks for uploading
has been helpful

[kartik]

Defination of supply-demand analysis below

A technical evaluation of securities on the basis of factors affecting the supply of and demand for a particular security or securities in general.Supply-demand analysis is supposed to determine if an imbalance exists or will exist between supply and demand for securities. For example, if the supply of a security is expected to exceed demand, thesecurity should be sold or not purchased because its price can be expected to decline. Supply-demand analysis incorporates information on new stock offerings, government borrowing, contributions topension funds, mutual fund cash balances, and a number of other similar factors.

[anands.sachdeva]

Need a project on managerial economics.....urgently rqd ..send at ASAP....SEND PRIOR 25TH SEPT NLY...NOT BYOND THAT

[music.923]

hi...
these are NOTES on MANAGERIAL ECONOMICS

Economics for Global Managers (Managerial Economics)
As rightly stated by Prof. Robbins that Economic Problem is concerned with scare resources, which have alternative uses for satisfying human wants, which are unlimited. It is a problem of choice, a choice between ends and also a choice of using scare resources between alternative uses with the objective of maximizing satisfaction.

Thus, Managerial Economics may be viewed as economics applied to problem solving at the level of the firm. The problem is of allocating resources among competing ends. If an organization wants to maximize its profit, it must maximize its output and minimize the total cost involved in manufacturing the output. Managerial Economic Theory comprises of Micro Economics and Macro Economics. Micro-Economics deals with the theory of firms and individuals (for example – price / demand theory, market structure); whereas; Macro Economics deals with the study of the industry and economy (balance of payment, business cycle, economic policy, national income are macro-economic study).

Wikipedia explains the concept as, “Managerial Economics (also called business economics), is a branch of economics that applies microeconomic analysis to specific business decisions. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation, Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research and programming”.

It also states that almost any business decision can be analyzed with managerial economics techniques, but it is most commonly applied to:

a) Risk analysis - various uncertainty models, decision rules, and risk quantification techniques are used to assess the risk of a decision.

b) Production analysis - microeconomic techniques are used to analyze production efficiency, optimum factor allocation, costs, economies of scale and to estimate the firm's cost function.

c) Pricing analysis - microeconomic techniques are used to analyze various pricing decisions including transfer pricing, joint product pricing, price discrimination, price elasticity estimations, and choosing the optimum pricing method.

d) Capital budgeting - Investment theory is used to examine a firm's capital purchasing decisions.

The role of Managerial economist involves understanding the objective of the firm (their vision, mission, values, standards, attitude, and norms); analysing the external factors (competition, social, cultural, economic, global, demographic, natural, technological, political and legal environment); market structure (whether it is monopolistic market/ oligopolistic market / monopolistic competition / perfect competition). As mentioned earlier that Managerial Economics involves proper allocation and selecting of scare resources; which requires effective decision-making.

The process of decision-making is explained by W-Bruce Allen in 5 basic steps which are stated below: -

1. Establish Objectives.
2. Define the Problem.
3. Identify possible solutions.
4. Select the best possible solution.
5. Implement the decision.

Thomas Sowell once quoted, “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

[music.923]

CONSUMER BEHAVIOUR
Information Search and Decision Making
Problem Recognition. One model of consumer decision making involves several steps. The first one is problem recognition—you realize that something is not as it should be. Perhaps, for example, your car is getting more difficult to start and is not accelerating well.. The second step is information search—what are some alternative ways of solving the problem? You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days. Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory). In reality, people may go back and forth between the stages. For example, a person may resume alternative identification during while evaluating already known alternatives.
Consumer involvement will tend to vary dramatically depending on the type of product. In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing program or acne medication).
It is important to consider the consumer’s motivation for buying products. To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer’s self-esteem. A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer’s family, which achieves the desired end-state of security. In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.
Information search and decision making. Consumers engage in both internal and external information search.
Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example, the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships. Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need—e.g., through brochures, web sites, or news coverage.
A compensatory decision involves the consumer “trading off” good and bad attributes of a product. For example, a car may have a low price and good gas mileage but slow acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas. Occasionally, a decision will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.


The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed).
Two interesting issues in decisions are:
• Variety seeking (where consumers seek to try new brands not because these brands are expected to be “better” in any way, but rather because the consumer wants a “change of pace,” and
• “Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group. For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn. Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more motivated. For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self. Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented. Personality impacts decisions. Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers offer a money back guarantee. Consumers will tend to change their behavior through learning—e..g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes. Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle). We will consider the issue of lifestyle under segmentation.

[mani2458]

thank you... nice work buddy.... t................................................. .................................................. .................................................. .........

[vishwashok]

thnakx yaar i really needed this
.................................................. .....