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Assignment - Microeconomics

   

Added on  2020-04-15

10 Pages1884 Words95 Views
Running head: MICROECONOMICS MicroeconomicsName of the StudentName of the UniversityAuthor Note
Assignment - Microeconomics_1
1MICROECONOMICS Introduction In economics, the term “market” denotes a forum where the buyers and sellers interactwith each other and reach to a mutually agreeable situation regarding price and quantity of agood or a service. The demand curve, reflecting the buyers’ side, shows the willingness of thebuyers to buy a commodity at different level of prices (Hall and Lieberman 2012). On the otherhand, the supply curve, in the market shows the dynamics in the sellers’ side, which reflects thewillingness of the sellers to sell their commodities or services at different level of prices. Theequilibrium in the market, defined as the point of mutual agreement between the buyers and thesellers, occur in the economy where the demand and the supply curve intersects and thewillingness to buy of the buyers matches with the willingness to sell of the sellers (Baumol andBlinder 2015). Keeping this in consideration, it can be asserted that there are immense significance ofthe pricing strategies taken by the sellers in the market as the prices of the commodities andservices offered by the sellers act as one of the primary determinants of the demand for thecommodities by the customers. The sellers, often take this into consideration while designingtheir pricing strategies to win over their competitors (Nicholson and Snyder 2014). The essay tries to take into account this aspect of pricing strategies, other microeconomicfactors including the economies of scale, price discrimination and nature of market prevailing,and tries to discuss how these microeconomic factors affect the demand and supply dynamics inthe market of an economy. To discuss the same, the essay uses the reference of Amazon, one ofthe global corporate giants in the contemporary global economic scenario and discusses thepositive as well as negative aspects of their pricing strategies.
Assignment - Microeconomics_2
2MICROECONOMICS Demand, Supply and Pricing Strategies In Microeconomics, the producer’s behavior in general emphasizes on the generalobjective of the firms in the market, in an overall framework. The primary objective of thesellers, in general is to maximize their profit or minimize their cost of productions. This can beachieved with the help of several mechanisms, which are related to the economic conceptsincluding increasing demand, decreasing cost of production through more efficient productiontechniques, usage of optimum pricing strategies and others (Rader 2014). In general, demand of a commodity increases if the price of that commodity falls, giventhat the commodity concerned is a normal good. This can be shown with the help of thefollowing diagram: Figure 1: Changes along the demand curve due to changes in price of a product(Source: As created by the author)
Assignment - Microeconomics_3

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