Factors influencing Product Mix: 1. Cost of production. Economies of large scale production. Use of wastage. Reaction to competitors.
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Com w. June 2 Section I Dr. June 3 Dr. Ranga Sai Dear Student friends… During these days of commercialization it becomes very difficult to find information on web which is relevant, authentic as well as free. We believe that knowledge should be free and accessible to all those who need. With this intention the notes, which are originally intended for the students of Vaze College, Mumbai, are made available to all, without any restrictions. These notes will be useful to all the F.
Distance Education students are advised to refer the recommended syllabus. This is neither a text book nor an original work of research.
It is simple reading material, complied to help the students readily understand the subject and write the examinations. We no way intend to replace text books or any reference material. This is purely for academic purposes and do not have any commercial value. Feel free to use and share. We solicit your opinions and suggestions on this endeavor. June 4 Dr. Ranga Sai Module I: Demand analysis Utility analysis of consumer behavior given by Marshall is based on the cardinal measure of utility.
The theory is based on the basic assumption that the utility can be measured. Accordingly, the theory describes utility as the want satisfying capacity of a good. Such utility is classified as time utility- a good changes form time to time depending on the seasons; place utility- a good changes utility with changing form.
It depends on the want satisfying capacity of the good. Exchange value, on the other hand deals with what a good can get in return in the market. The value paradox states that use value and exchange value are inversely proportional. With increasing use value of good its exchange value decreases.
Similarly with increasing exchange value its use value decrease. This conflict is called as value paradox. Under the utility theory the consumer behavior is explained by the Law of diminishing marginal utility. The consumer maximizes his satisfaction by equating marginal utilities of all the goods he consumes. This is called the law of equi-marginal utilities. Business Economics Paper I, F. June 5 Dr. Firstly, the theory studies the consumer behavior and secondly, the theory will suggest the consumer the way in which satisfaction van be maximized.
In utility analysis, the Law of Diminishing marginal utility studies consumer behavior and the law of Equi-marginal utilities suggested a method of maximizing consumer satisfaction.
The theory is an improvement over Utility analysis. Utility analysis had a major draw back that it measured utility in cardinal terms. Indifference curve analysis measures utility in ordinal terms.
Further, IC analysis provides wider descriptions and details as compared to utility analysis. IC deals with various combinations of two goods which give the consumer the same amount of satisfaction. Indifference Schedule.
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