ECON SELFIE ASSIGNMENT

Submitted by

Abbasi Soni FT182001

Arunika Mishra FT182022
Bhupesh Kumar FT182030
Devanshu Arya FT182033
Sharad Chandar R. FT182084
Vaibhav Kathuria FT182098
Vignesh Mohan FT182103
SECTION 2|TERM-2|MICRO ECONOMICS|GREATLAKES INSTITUTE OF MANAGEMENT|2017-18
Selfie 1: A deserted cafeteria!

A new cafeteria but empty most of the time!

Our first selfie deals with the impact of the new cafeteria.

Initially, the supply (S1) and demand (D1) is shown in the graph below. This is when there were
only about 440 PGPM students. Both the supply and demand lines are neither too elastic nor
too inelastic. When 240 PGDM students arrived, the demand curve shifted from D1 to D2.
Correspondingly, supply also shifted from S1 to S2 to maintain the same equilibrium (E1=E2).
Hence there was a quantity increase from Q1 to Q2 but per head costs remained the same.
When the new vegetarian cafeteria was opened in the first floor, initially there was an artificial
increase in demand. This is because although the food was shifted there, most of the students
still preferred to use the ground floor cafeteria due to ergonomic constraints as it was easier to
approach. So, more quantity of food would be consumed in ground floor and there was a lot of
wastage of food in the first floor. As a result, the quantity of food increased from Q2 to Q3 in
the curve. This is because demand artificially rose from D2 to D3 and a new equilibrium point
E3 was reached where the price per person was also slightly higher.

In a few days, the canteen staff noticed this and the demand was bought back to original
position S2. This was done by controlling parts of the canteen in the ground floor so that people
would be forced to use the first-floor canteen. Also, the quantity of food taken to the first floor
was reduced to avoid wastage. Hence, the equilibrium condition E2 was restored.
Selfie 2: Surge Pricing/Fleecing by auto rickshaws in Mahabalipuram

The Auto rickshaws really do take us for a ride!

During the day, the supply (S1) and demand (D1) for the auto rickshaws is as shown below. The
demand is inelastic as the persons who need to reach the college from Mahabalipuram do not
have much choice other than taking an auto rickshaw, unless they have their own vehicle.
On normal days, during night, the demand shifts to the left and so does the supply. Since the
demand is inelastic, the price increases from P1 to P2. This is what is referred to as the night
price and can vary from Rs. 30 to Rs. 50 more than what we pay during the day.

On occasions where students from GLIM enter Mahabalipuram after exams, there is a sudden
spike in demand. Since this demand was not anticipated, the supply remains the same. Because
of the high demand, the prices spike up as shown in the below graph. Prices that were Rs. 150
during the day can go to up to Rs. 350 at night and those auto rickshaw drivers become highly
profitable as a result.