PAGE No.

DATE

ue'sancgelioetoNomies t aintegtakim
orbtusiness
probldms economIcs Aheory,
GExblain he Skakemenf
utththtAtulable_diagram
lanaqCHial eronomi Iheopplicotimeconomic
htok and aholytio Uhusinegs
mekhodr fb Hhe
cleoidims iovplye hc uIe Up edtnomic
Conceptsond fechniqursaonalty7t ond delivt
hucinesproblem 4_diagom lluchates
hiiConteph i Venn cliogramiurhenethe
intenSecHm he circleshresenth he atea
o oveilop bttween economide and businec
epresen Hing he aMto monaqeual eronomiri.
lhe cirkden ht lek_represeoh
eChnomis
Ond Hhe circlemherighf reþresenhbuginese.
dhe ntea DYCHlab rebre8hti
dhe nreqro him o
htsetwoeldiond tht abplitakim
Uaternnohiu
Conceptshdtechnigursobsines
problems

BuxinessNeoitian-
Makin lfablm
tconomicheory:
Aecisian Sornte
croeconoii
ac Loero0omii Obhimitoim dechnibuES
AioimialCalculuc
tchital
Fhimalim,linsa

Monyeua ony/miS Irooiammin9Homedbeoy

K coNomILdhtoryand
echuts k eaSi duenes
o RI2ne
solvinq ss m_broblemN

OpFmaT dotatimta
BusinessPeusimproblems.
(QUes/anageuialecanomirstheulimate SoluHm
koal buLÍnecsbroblemsAiteuE thedetails
Planag.exial economit Contept
ttbnomics_uses
Qne UmeHhods ta analupeand undetstand
businessdecicin 0fhel>s
manaqcs tp
identi and undexstandHhe etohomore
idenh
thak aler thei
he businesand foma.Ke
hutines

It
fnomedecisiong basedm his hndp
undor
sterding ako hdlpsmanog es idenily

í
Ond tyaluate pofentiolGpforhuniliec
bnd
ttksond toieclopstotegferourmoximi
PLoihandminimitlnts
Houneveyit impulontto notetha manaoeunl
flonomis nolapanarea_orall
bucinec
_prDblems.hile iftan_provlHe
valta
ble
insight ond inoo
uidaneeit lubshi
ntheh_ormso onolysŠ_Such ar
hute_lor
maMkeP retdcby
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Shateqic_plonninqHdIhmolly_monaqex
Ptonem i hied_m_asmptmsUand
models urhich may not alcoayr
accuHatel_
the CombJexihes d he ttal
uroNe._
Ako,it
isImbortonE
fo(onsidey
thatwbile
korideso wayfo unalestand
economLes
he maukeand its undlenlqinq_loile
 PAGE NO.

Cannafpredhc he_utneUnpreseenPrenh
and chadaeg inmtlke CcnditimsCan haye to
Signilican impacora businessrrqaHdleS
Kow ell the manageH unlestodH onrl
applied hefconomik/ Lanebh

gn ummay uwhilemonageHia economici fa

Iselal or
tno1 ond'Solvingbusiness
onaltingl/
Lbleas itnat GhU Slhimh
_ulhmahe
all PMonages Should useo
blusinessbrDblems.
Vazdelygonalybital koy ond methodi
includina mandaeiialh economicrtomake
i'nprme deriicd Addiimollyi imparkan ii
foUbe_waHe D the imitoHoms Ceonormren
and Fo btpbepared or mexeetrdtyen
and honge thmanRe Condihms

Ques3Lauw demand Cannol beopbliceble

unde
eveHy CondiHoms explain the sStalemen tith
Pxohhle.

ahe lamn dertornd all

stategthat, athe thing
beingenlal he lqiontiky oagoo
demondec
Sevicewilldecreos Qs the rite
od Dr SeVteincrease Howevctthi
4hot ho
yeloimship hetumeen priceandquanti
demanded isnof oldauyrinea ond Ghr
Ott(eHfain/ondi
Hon LMdtuhich fhelauis
demand may no haldhtte.
 goxexanmplea lunyqond Such a a
designeyhondboq md dee on increase
ihdemand oçd i briteincreaser,
as thehighCos may be pencenyidasa
Sianal ih exclusisikbndd presHoe
I hir
Ucase, therelo
lkanshihhethecn
riceOnd quanhky demanglec 1sinyue
londhilau
Anothet exgrmple
gaodh ha
i
afdemand dere notabbly
eilhen
benple COhun
'gaodk, ate
trhith
mprc d arthe
ag Shaple dbd ihems
ri'ce incredsci,_duch
na ÞDar elDnDm, dhe iNCHCHe in_pritc
may make the90td relahivtly mDre fxpenciye
Coslpated o:pthth nthe hopdi,aiusing
edplc_to Subshuke way Vomthemd
buf tht_Q00d SlaywilAlskil
he _ansidturd
nassiky/oConmeu may ConhnIC o
uhchoteidecpit he 41ncreattin
priCe.

AddiinallyLnnstimehdermand Con alto

be
altectedUhy cthe attorsuch as Lonsme
VUyCome Utonsumeh taskesCpnsumc
exbertohmgand Lonsiunen clemDgraphis
ektSo,we ConSy thaFthtlauda demnd
notalwaur obSMtahle unde 1eveky
Labblicabl tndey rueuy Condiliomodd i
Coo_htakected by_uauntu crs
 PAGE NOo.

DATE

sapré=requsteorevLh
LIesyI Lirmfoariveo
egLusTbril CdndihonScme lshnP_i:then
equilibrium
hasnoE atlaine etmacenegalveCansequencei
Elabarate

Alhen akim
an dstauili4ium aoirm.
endikicn
i
it_mnnt
In_dikcqulibrium tha the
maukeb Jorces
ubbly
in balance,and the
otik_ophimallevel Ahee
ir
Supbly,ond demand aHe np
naEapetaking
aHe sevendl_botia
Lonsequehtes tha/ akim may Lace_tuhehin.
tehulibrium.
Une Common Congequences
o
m0y be lInoble delalo
i thafthe_irm
1tgoods or
Svitesrg Itgdinoko excesGnveMtory orLUhme
demond._dhisU Con fecul inlpsFWyenue ond
increased Cosksor_th irmdurto theneed
foSkore_ordipbcc Less inventoy

that
Anolhon CoAseopLenc_a diceqtuilibrium
he_Lim mo b_lorted toowen_k frite_In
ordeh_p (leaM eyreesVenloyhith ton_
regul in_redL ed bropih-_AM:limoly
he
heipm_i Seling qhodlpordevies ite
hat0 He belowdiCosk produeio
Can nCur lOSSCS
 a demand luue
Yanket eoquilihrium Mouke
ond mo:ilcekSupply, dht toike
Cwnve
neydboHh thr-
Qn egtulIbtiiumUhrire
and he prodiuLes
plaueys Con cunol
imþliet
eguflibrium
a Sokilied._1Psket
that Lhe tneibheyduAlageSuxpblurs
deman
Supply 50
15

95 30 30
30
35

30
ANIT
lairepeqilibrium
Can be pepiched
hy blaHinqthedemand
orephitall uive
dulth Sply_Cubve asintheahDV
m
eliaqro
 DATE

Ahete cau_besitualininuhirhfquilibrium
Jtauy occt uhithit
duefo_brice higheyoc
Ubwe han 95

dhe tup types dihyoiamsaxe

sHplusLk tessSPbbly-
Sutage lextessdemond.

OSblaslExcesupbly

Sxbls

uANn
n_the above_iquHe hepriceis2othe
Lousuce_dembne unit o he Commodi
yen he demoned Cue at bitbete
he oe illingfó Subpl,45_tt
Subblies
Gpenhe SuphlyLunyeUSs
 duutage LSxcK demond

Sage
TO

QuANT 1Y

pice isletcCay
So giyen hy
15
the
uanhl _demandea
demondP CuYve
Cue uooil i
Subplied the lunits,
given
thedubbly LufveÍS as snoon inthe
Ohore we

Quessbxplain_pnthve
ond ncgativeeyfeunaliies_m
deail.
Aposidive exHnolikyso hehefik
fhaf
exjoyed by o hi
paky d reaulha a àn
eLnHome d Corexomple
tronsockin. C
Laumaplank Aresm_slhtin_þrahez4
Hhe
DSuMDUundling ommunily mdy olhenet
Luom thtfkereasedshákle_e6l
auQ1aliky.
A ntgalit tytinality tuslhakin i
 PAGE NO.
DATE

LSulLened h athiralpatkyosresulEan

i
etonoMtttonsaclim.U orekamble,0ip
actory emikipolloHm, tny
netaxby reSidents
Oheo ht lostatdticed
al gnalikymithk
pbllufhon.

Oosikve externaliher aneee hichimhrove

ht banHi pohims anterreases
lahouwrs the
lemond hr nvikim osialSezuikyA
extéunalihyi lalso_called
hosi-ive exdna
hene

OLANTLY

Hebresent Índicaks
Jhe Suhtd deniondCuttue
ha beheihunLulelheneliSurkyas
lulotial
a hale.dheequilhriuminulehoye_ooint
Considoned.
IRhen theCddihmalhtnelikoHedelling
iQ
A baintBhe Jeveld plbnhky
OL,
o_brite
Negative exonalilies
hithreshirktheintegriky
hOn eltc
c uiiaiky
tu inthetoodky Lemd uhmataly
groups pret
adedregse proddehiikyA
dotan4heuh
negakiniky eytennalikyis_aloUalled
PesthakL
issueiCos
Cnst hkies hen_ixdfanky
DIlosshtcuta any honstakms
-
betwten a buyen Onc ol ha
&elloprkicde
he thirdpan hal Mo innohemen tnSelen
ranscotim

QUANTTY.

Negakive xfeunaliHetepresenkCosithith
hahe fohe inthe rodluchims
isutclL a
dha qp.ncl._
Hence,dhe duited produchim ct
hy
iseprec.ented Ahi tist knomn_ar
Lahginal SouekyCst rehttienhdhe uli
Cos Yo doutkyUnfSouial
tns innuHtdiR Ihe
brodurhiomUelhaPgabol.