A price ceiling can be defined as the price that has been set by the government below the equilibrium price and cannot be soared up above that. A price floor is said to exist when the price is set above the equilibrium price and is not allowed to fall. It is used by the government to prevent the prices from hitting a bottom low.
Elasticity of Supply is a measure of the degree of change in the quantity supplied of a product in response to a change in its price. According to Prof. Thomas, “The supply of a commodity is said to be elastic when as a result of a change in price, the supply changes sufficiently as a quick response. Contrarily, if there is no change or negligible change in supply or supply pays no response, it is elastic.”
The cross elasticity of demand can be defined as a measure of a proportionate change in the demand for goods as a result of a change in the price of related goods. According to Ferguson, the cross elasticity of demand is the proportional change in the quantity demanded of good X divided by the proportional change in the price of the related good Y.
An increase in the income of consumers increases the demand for the product even if the price remains constant. The responsiveness of quantity demanded with respect to the income of consumers is called the income elasticity of demand.
The concept of price elasticity of demand plays an important role in the functioning economies by having a significant contribution in the field of industry, trade, and commerce. Not only this, it helps organisations in analysing economic problems and making appropriate business decisions.
The price elasticity of demand of a product reflects the change in the quantity demanded as a result of a change in price.Factors Affecting Price Elasticity of Demand: Relative Need for the Product, Availability of Substitute Goods, Impact of Income, Time under Consideration, Perishability of the Product, Addiction.
The extent of responsiveness of demand with change in the price does not remain the same under every situation. The demand for a product can be elastic or inelastic, depending on the rate of change in the demand with respect to change in price of a product. Based on the rate of change, the price elasticity of demand is grouped into five types.
Price elasticity of demand is a measure of a change in the quantity demanded of a product due to change in the price of the product in the market. It can also be defined as the ratio of the percentage change in quantity demanded to the percentage change in price.
In economics, the elasticity of demand is a degree of change in the quantity demanded of a product in response to its determinants, such as the price of the product, price of substitutes, and income of consumers. There are three types of elasticity of demand: 1. price, 2. Income, 3. Cross elasticity of demand
Market power define as the ability of an organisation to raise the market price of a good or service over marginal cost to achieve profits. It can also be defined as the degree of control an organisation has over the price and output of a product in the market. A firm with total market power is in a position to raise the prices without any loss of customers.
Market structure can be defined as a group of industries characterised by number of buyers and sellers in the market, level and type of competition, degree of differentiation in products and entry and exit of organisations from the market. The study of market structure helps organisations in understanding the functioning of different firms under different circumstances.
In economics, Market failure occurs when there is an imbalance in the quantity of a product demanded and supplied, which leads to an inefficient allocation of resources. These failures can occur due to a variety of reasons, such as the existence of externalities, public goods and incomplete information.
Revenue is the total amount of money received by an organisation in return of the goods sold or services provided during a given time period. In other words, revenue of a firm refers to the amount received by the firm from the sale of a given quantity of a commodity in the market.
Long run cost refers to the time period in which all factors of production are variable. Long-run costs are incurred by a firm when production levels change over time. In the long run, the factors of production may be utilised in changing proportions to produce a higher level of output. In such a case, the firm may not only hire more workers, but also expand its plant size, or set up a new plant to produce the desired output.
Economies of scale refer, as a firm expands its production capacity, the efficiency of production also increases. It is able to draw more output per unit of input, leading to low average total costs. Diseconomies of scale refer to the disadvantages that arise due to the expansion of a firm’s capacity leading to a rise in the average cost of production.
A short-run period refers to a certain period of time where at least one input is fixed while others are variable. In the short-run period, an organisation cannot change the fixed factors of production, such as capital, factory buildings, plant and equipment, etc. However, the variable costs, such as raw material, employee wages, etc., change with the level of output.
While computing the total cost of production, there are several types of costs that an organisation needs to consider apart from those involved in the procurement of raw material, labour and capital. 10 Types of Costs - Opportunity, Explicit, Implicit, Accounting, Economic, Business, Full, Fixed, Variable, Incremental.
There are different types of production functions that can be classified according to the degree of substitution of one input by the other. 3 Types of Production Functions: Cobb Douglas, Leontief and constant elasticity substitution (CES) production function.
Production function can be defined as a technological relationship between the physical inputs and physical output of the organisation. It is a statement of the relationship between a firm’s scarce resources and the output that results from the use of these resources.
Production Possibility Curve (PPC) is a curve that shows the alternative combinations of two goods and services by using all the available factor resources, efficiently. In economics, the Production Possibility Curve provides an overview of the maximum output of a good.
In economics, Production is a process of transforming tangible and intangible inputs into goods or services. Raw materials, land, labour and capital are the tangible inputs, whereas ideas, information and knowledge are the intangible inputs.
Demand forecasting can be effective if the predicted demand is equal to the actual demand. The effectiveness of demand forecasting depends on the selection of an appropriate forecasting technique. Each technique serves a specific purpose; thus an organisation should be careful while selecting a forecasting technique for a particular problem.
Demand forecasting is a process of predicting the demand for an organisation’s products or services in a specified time period in the future. Methods of demand forecasting are broadly categorised into two types.
Demand forecasting is a process of predicting the demand for an organisation’s products or services in a specified time period in the future. Demand forecasting is helpful for both new as well as existing organisations in the market.
An indifference curve can be defined as the locus of points each representing a different combination of two good, which yield the same level of utility and satisfaction to a consumer. Therefore, the consumer is indifferent to any combination of two commodities if he/she has to make a choice between them.
The law of diminishing marginal utility states that as the quantity consumed of a commodity continues to increase, the utility obtained from each successive unit goes on diminishing, assuming that the consumption of all other commodities remains the same.
Consumer demand analysis is a process of assessing consumer behaviour based on the satisfaction of wants and needs generated by a consumer from the consumption of various goods. The satisfaction that consumers gain out of the consumption of a commodity or service is called utility.
The level of satisfaction derived by a consumer after consuming a good or service is called utility. In economics, utility can be defined as a measure of consumer satisfaction received on the consumption of a good or service. The concept of utility is used in neo classical Economics to explain the operation of the law of demand.
Movement in the supply curve is when the commodity experience change in both the quantity supply and price. The shift in the supply curve is when, the price of the commodity remains constant, but there is a change in quantity supply due to some other factors.
In economics, supply curve is a graphical representation of supply schedule is called supply curve. Supply curve can be of two types, individual supply curve and market supply curve.
In economics, a Supply schedule is defined as a tabular representation of the law of supply. It represents the quantities of a product supplied by a supplier at different prices and time periods, keeping all other factors constant. There can be two types of supply schedules are Individual and Market supply schedule.
The law of supply states that the relationship between price and supply of a product. According to the law of supply, the quantity supplied increases with a rise in the price of a product and vice versa while other factors are constant. The other factors may include customer preferences, size of the market, size of population, etc.
Supply does not remain constant all the time in the market. There are many factors that influence the supply of a product. Generally, the supply of a product depends on its price and cost of production. Thus, it can be said that supply is the function of price and cost of production. These factors that influence the supply are called the determinants of supply.
Supply is an economic principle can be defined as the quantity of a product that a seller is willing to offer in the market at a particular price within specific time. The supply of a product is influenced by various determinants, such as price, cost of production, government policies, and technology.
Movement in the demand curve is when the commodity experience change in both the quantity demanded and price. The shift in the demand curve is when, the price of the commodity remains constant, but there is a change in quantity demanded due to some other factors.
In economics, a demand curve is a graphical presentation of the demand schedule. It is obtained by plotting a demand schedule. The demand schedule can be converted into a demand curve by graphically plotting the different combinations of price and quantity demanded of a product.
Demand function represents the relationship between the quantity demanded for a commodity (dependent variable) and the price of the commodity (independent variable). There are mainly two types of demand functions: Linear and Non Linear function.
In economics, a demand schedule is a tabular representation of different quantities of commodities that consumers are willing to purchase at a specific price and time while other factors are constant. The demand schedule is of two types: Individual Demand Schedule and Market Demand Schedule.
The law of demand is given as, “If the price of a product falls, its quantity demanded increases and if the price of the commodity rises, its quantity demanded falls, other things remaining constant.”
Determinants of demand are the factors that influence the decision of consumers to purchase a product or service. What drives demand? In economics, there are 10 determinants of demand for individual and market.
Demand refers to the willingness or effective desire of individuals to buy a product supported by their purchasing power. Demand is generally classified based on various factors.
In economics, Demand is a relationship between various possible prices of a product and the quantities purchased by the buyer at each price. In this relationship, price is an independent variable and the quantity demanded is the dependent variable.
Inflation can be defined as the persistent increase in the price level of goods and services in an economy over a period of time. If the rise in prices exceeds the rise in output, the situation is called inflationary situation.
The Business Cycle, also known as the economic cycle or trade cycle, is the fluctuations in economic activities or rise and fall movement of gross domestic product (GDP) around its long-term growth trend. Business Cycle can also help you make better financial decisions.
Laws of Economics Definition Marshall gave laws of economics definition as“Laws of Economics or statements of economic tendencies, are those social laws, which relate to…
Economics is divided into two branches, namely: microeconomics and macroeconomics. Microeconomics deals with the economic problems of a single industry or organisation, while macroeconomics deals with the problems of an economy as a whole.
Business Economics is playing an important role in our daily economic life and business practices. Organisations face many problems on a day to day basis. For example, organisations are always concerned with producing maximum output in the most economical way.
Earlier, the scope of economics was limited to the utilisation of scarce resources to meet the needs and wants of people and society. Over the years, the scope of economics has been broadened to many areas.
Similar to the economics definition, there are a number of controversial issues related to its nature of economics. Some economists consider economics as a science, or economics as a social science while others have a believe economics as an art.
Economics is the science that deals with production, exchange and consumption of various commodities in economic systems. It shows how scarce resources can be used to increase wealth and human welfare.
Expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management in 1964. Vroom's Expectancy Theory separates effort, performance and outcomes. Vroom’s Expectancy Theory has assumed four assumptions. Expectancy, Instrumentality and Valence.
Theories of learning have been developed as models of learning which explain the learning process by which employees acquire a pattern of behavior. Four Theories of Learning are: Classical conditioning theory, Operant conditioning theory, Cognitive learning theory, Social learning theory.
The word personality is derived from a Greek word “persona” which means “to speak through.” Personality is the combination of characteristics or qualities that forms a person’s unique identity. It signifies the role which a person plays in public. Every individual has a unique, personal and major determinant of his behavior that defines his/her personality.
OD interventions are the building blocks which are the planned activities designed to improve the organisation’s functioning through the participation of the organisational members. OD innervations include team development, laboratory training, managerial grid training, brainstorming and intergroup team building.
Planned change or developmental change is undertaken to improve the current way of operating. It is a calculated change, initiated to achieve a certain desirable output/performance and to make the organization more responsive to internal and external demands.
The Boston Consulting Group (BCG) Matrix is a simple corporate planning tool, to assess a company’s position in terms of its product range. The Boston Consulting Group (BCG) Matrix is a portfolio management tool created in 1970 by Bruce Henderson. It is also referred to as the BCG growth-share matrix.
The value chain model is also known as Porter’s Value Chain model. Analysis is a business management tool that was developed by Michael Porter and described in his popular book Competitive Advantage: Creating and Sustaining Superior Performance in 1985.
Strategic management process is a method by which managers conceive of and implement a strategy that can lead to sustainable competitive advantage. It is the process of managing, planning, and analyzing in order to reach all organizational goals.
Strategic management can be described as the identification of the purpose of the organisation and the plans and actions to achieve that purpose. It is that set of managerial decisions and actions that determine the long-term performance of a business enterprise.
Brand equity is the value of the brand in the marketplace. We can say, the total accumulated value or worth of a brand. Financial accountants define brand equity as the total value of a brand as a separable asset and often called brand valuation or brand value.
Brand Management is the function of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. The process of maintaining, improving, and upholding a brand so that the name is associated with positive results.
New product development process plays a crucial role in deciding the future of the organisation. Every product has a life of its own and it becomes obsolete after a certain period of time. It is essential to develop new products or alter or improve the existing ones to meet the oft-changing customer needs.
Demand forecasting is an attempt to estimate the future level of demand on the basis of past as well as present knowledge and experience, to avoid both under production and overproduction. Without forecasting, forward planning will be directionless and meaningless.
The buying behaviour of organizations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others. Organisational buying is also called institutional buying and when the products are used in their own production process, the buying process is called industrial buying.
Consumer behaviour refers to the actions of consumers in the market place and the underlying motives for those actions. Marketers expect that by understanding what causes consumers to buy particular goods and services they will be able to determine which products are needed in the market place, which is obsolete, and how best to present the goods to the consumers.
Marketing Concept is the philosophy that an organization should analyze the needs of their consumers and then make decisions to satisfy those needs, better than the competition. There are five different marketing concepts: Production, Product, Selling, Marketing, Social Marketing Concept.
Market Segmentation is the sub-dividing of a market into homogeneous subsets of customers, where any subset may conceivably be selected on a market target to be reached with a distinct marketing mix. Types of market segmentation are geographic, demographic, psychographic and behavioural segmentation.
A CASE (Computer Aided Software Engineering) tools mean any tool used to automate some activity associated with software development. Some of these CASE tools assist in phase-related tasks such as specification, structured analysis, design, coding, testing etc.
Risk management aims at reducing the chances of a risk becoming real as well as reducing the impact of risk that becomes real. Three activities in risk management are risk identification, risk assessment, risk mitigation.
COCOMO (Constructive Cost Estimation Model) model was proposed by Boehm (1981). According to Boehm, software cost estimation should be done through three stages: Basic COCOMO, Intermediate COCOMO, and Complete COCOMO.
Software maintenance is the process of modifying a software system or component after delivery to correct faults, improve performances or other attributes, or adapt to a changed environment.
An entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the basic tool of entrepreneurs, the means by which they exploit change as an opportunity for different business of service.
Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business along with any of its risk in order to make a profit. The people who create these businesses are called entrepreneurs.
A good software design implies clean decomposition of the problem into modules and the neat arrangement of these modules in a hierarchy. The primary characteristics of neat module decomposition are low coupling and high cohesion. Cohesion is a measure of functional strength of a module.
Software design deals with transforming the client requirements, as described in the SRS document, into a form (set of documents) that is suitable for implementation in a programming language.
At a technical level, software engineering begins with a series of modeling tasks that lead to a complete specification of requirements and a comprehensive design representation for the software to be built. The first technical representation of a system which is the analysis model, actually a set of models. There have been many methods proposed for analysis modeling.
A software requirement specification (SRS) is a comprehensive information/description of a product/system to be developed with its functional and non-functional requirements. The software requirement specification (SRS) is developed based on the agreement between customer and supplier.
The requirements elicitation and specification phase starts when the feasibility study phase is completed and the project is found to be technically and feasible. The goal of the requirements analysis and specification phase is to understand client requirements and to systematically organize these requirements in a specification document.
Evolutionary model is also referred to as the successive versions model and sometimes as the incremental model. In Evolutionary model, the software requirement is first broken down into several modules (or functional units) that can be incrementally constructed and delivered.
The spiral model is a software process model that couples the iterative nature of prototyping with the controlled and systematic aspects of the linear sequential model. Barry Boehm mentioned the Spiral model in this paper (1986).
A prototype model is a toy/demo implementation of the actual product or system. A prototype model usually exhibits limited functional capabilities, low reliability, and inefficient performance as compared to the actual software.
In Iterative waterfall model, the feedback paths are provided from every phase to its preceding phase. In practice, it is not possible to strictly follow the classical waterfall model for software development work. In this context, we can view the iterative waterfall model as making necessary changes to the classical waterfall model so that it becomes applicable to practical software development projects.
The classical Waterfall Model was the first Process Model. It is also known as a linear-sequential life cycle model. It is very simple to understand and use. Classical waterfall model is the earliest, best known and most commonly used methodology.
A software development life cycle (SDLC) is a series of identifiable stages that a software product undergoes during its lifetime. A software development life cycle model (also called process model) is a descriptive and diagrammatic representation of the software life cycle.
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