Introduction:

Microeconomic concepts like decision-making, market equilibrium (demand and supply), production, cost and revenue,
and market structure are the primary focus of the project work and field study on the ‘Jai Shree Ram’ decor.
Markets, businesses, and households are just some of the examples of "microeconomics" entities that are studied. The
factors that go into determining prices for things like land, labour, and capital are also taken into account. One part of this
process involves recognizing the market's remarkable efficiency features. When individuals pursue their own economic
interests in a free and open market, the collective good can be achieved. The study of monopoly, the function of
international trade, finance, and many other important topics are now central to modern Micro Economics, which has
expanded far beyond its humble origins.
The field of microeconomics focuses on the actions of specific businesses, consumers, and markets. Much of the drama
and debate over economic history and economic policy can be found in the development of individual markets.
Supply and demand aren’t something we can just memorize by repeating the words. Acquiring a comprehensive
understanding of microeconomics requires familiarity with such concepts as demand and supply curves, cost, and the
distinction between perfect competition and monopoly.
We will cover these and other essential areas as we journey through the sector to learn about the exciting field of
microeconomics.

Objectives of the project:

Our company's primary focus is on manufacturing products of exceptional quality in terms of their visual appeal, tactile
appeal, and durability, all of which combine to make our furniture an excellent buy.
To use raw materials efficiently.
To strive to maintain the highest quality of furniture.
We are a market leader in the furniture industry.
To provide meaningful work for members of the community.
To train our staff to become experts in woodworking.
To work to protect the interests of our employees and the people we serve.

Primary objective:
The primary objective of this project is to study the demand and supply in the industry for “Jai Shree Ram” decor.

Secondary objective:
The secondary objectives of this project are:
To know about the company.
To know the demand and supply of the product.
To know how decision-making is done in this company.
To know the demand forecasting of the product.

Scope of the project:

Every project is undertaken to achieve a certain objective, which in turn serves a purpose and is important to one or more
parties. This firm's products are an appealing and functional mix of traditional and transitory ideas; we use Hand battered
Copper, Brass, Steel, Handmade as well as Imported Tiles, and Hand Paintings in the design and production of our
hardwood furniture, giving the company greater future potential.

This project provides a practical insight into demand and supply in a company.
To know the latest trend of demand and supply for the product.
This project is also helpful in demand forecasting.
Planning to implement a more ancient model to attract customers.
Delivery of supply can take place furthermore faster.
Implementing more innovative ideas to create an increased number of orders.
Implementing different technology of machines to do work.

Methodology:

Data Collection:
The core data like demand and supply trends was acquired through a conversation with the company's owner.
Secondary Data: The secondary data were assumed to explain all project concepts.

Research Design:
The research design refers to the overall method used to integrate the numerous components of the project in a coherent
and logical manner, so assuring effective addressing of the product's demand and supply.
This project is a causal or experimental study design that describes the company's product's market demand, supply, and
pricing. The purpose of the data collection is to determine the effect of manipulating the independent variable on the
dependent variable.

Swot Analysis:
Strength:
Best servicing.
Time management.
Customer loyalty.

Weakness:
Lack of Infrastructure.
Insufficient place.

Opportunity:
Importing new trending designs.
Digital Marketing.

Threats:
Company do not have online marketing.

Equilibrium Point:
Economic equilibrium may also be defined as the point at which supply equals demand for a product, with the equilibrium
price existing where the hypothetical supply and demand curves intersect.

Demand Supply
10000 4.3 1.5
25000 3.5 3
30000 2.5 4.5
40000 1 5

4
DEMAND
3 SUPPLY
Column1
2
1

0
10 25 30 40

Here,
X axis = Quantity
Y axis = Price

Demand:
Demand is the willingness and ability of buyers to purchase different quantities of goods at different prices during a
specific period of time.

Demand is determined by the following:

 Size of the market.
 Income of the customers.
 Price of the related goods.
 Taste and Preference.
 Population.
 Government policies.
 Special Influence.

As the economy has grown, more consumers are willing to buy luxury items for their living and work environments. The
global luxury furniture market is expected to grow at a CAGR of over 4 percent between 2015-2019. In terms of location,
Europe has the largest market for luxury furniture, but developing countries such as China and India are not far behind.
The demand of furniture increasing in these modern days.
More furniture vendors are choosing to go green.
With luxury comes the expanding trend to go green. Many vendors are developing eco- friendly furniture. This trend is
driven by environmental concerns, such as the problem of deforestation. Although eco-friendly furniture is more
expensive, the demand is on the rise, making it worthwhile for manufacturers and companies to offer these products.

Supply:
The supply side of the market typically involves the terms on which the business produce and sell their products. More
precisely, supply relates to the quantity supplied of a good to its market price.

Supply is determined by the following:

 The cost of production.
 Price of inputs.
 Technological advances.
 Prices of related good.
 Government policies.
 Special influences.

The product is supplied at the cost of 30,000 INR for wooden king-size double bed
The few data that we could collect are represented below:

Prices of Inputs 30,000 INR

Cost of Production 20,000 INR
Elasticity:
Supply and demand can often tell us whether certain forces increase or decrease quantities. But for these tools to be truly
useful, we need to know how much supply and demand respond to changes in price. The quantitative relationship
between price and quantity purchased is analysed using the crucial concept of elasticity.

Demand elasticity:
The price elasticity of demand measures how much the quantity demanded of a goods change when its price changes.

Data Collected for King size wooden bed per month:

S.no Year Quantity Demanded Price Per Set

1 2017 10 30,000

2 2016 15 25,000

In this case, the percent change in price is more hence it is a product with considerable elasticity

Supply elasticity:
Consumption is not the only thing that changes when prices go up or down. Businesses also respond to price in their
decisions about how much to produce. Economists define the price elasticity of supply as the responsiveness of the
quantity supplied of a good to its market price.

Data Collected for King size wooden bed per month:

S.no Year Quantity Supplied Price Per Set

1 2017 10 30,000

2 2016 15 25,000

Therefore, Supply Elasticity.

Demand forecasting:

Demand forecasting is predicting future demand for the product. In other words, it refers to the prediction of probable
demand for a product or a service on the basis of past events and prevailing trends in the present.

The calculation for demand forecasting:

Year Y (Demand) Sale CR (x) X2 XY

2013 80 2 6400 160
2014 85 2 7225 170
2015 89 2 7921 178
2016 80 1.5 6400 120
2017 65 1 4225 65
399 8.5 32171 693

Y = a+bx
∑y = na+b∑x
-∑xy = a∑x+b∑x2
693 = a9+b32171
399 = 5a+b399

5*(693=a9+b32171)
9*(693=a9+b32171)

3465=a49+160855
3591=a45-3591

-126=b157264
B=-8012 A=-0.124

∑y = na+b∑x
399=6*0.124+8012*9

2018=72168
2019=72108
2020=72108
2021=72109
2022=72109

From this above information, we came to know that the sales for the year 2013,2014,2015 was more than the current
years which is 2 crore and for the upcoming years the sales will rise. The company will have more demand in the coming
years.

Production – Return concept:

The production function specifies the maximum output that can be produced with a given quantity of inputs.
It is defined for a given state of engineering and technical knowledge.
Various stages of productivity can be witnessed in the company proving the law of variable
proportions.

Production of master normal bed set (Per month):

Labour TP AP MP
1 0 0 0
2 18 9 18
3 25 8.33 7
100%
4 35 8.75 10
5
90% 40 8 5
6
80% 45 7.5 5
7 55 7.85 10
70%
8 60 7.5 5
60%
9 70 7.77 10 MP
50%
10 75 7.5 5
AP
40%
TP
30%
20%
10%
0%
12345678910

X axis – Unit of labour

Y axis – Marginal Products/Returns

Financial Plan:
Below are the initial financial goals for the company:
 Obtain an operating line of credit from a financial institution.
 Finance growth through retained earnings.
 Operate on a 25-30% gross margin.

The financial plan for Trestle Creek Cabinets is outlined in the following sections.
Breakeven point:
It is defined as the level of output when total revenue is equal to total cost. This is the point of no
profit and no loss.

Year TP VC FC TC Price Per Average Price

2012 220 300000 500000 450000 25000 28000 250000
2013 240 450000 550000 460000 28000 30000 300000
2014 260 492000 580000 470000 30000 32000 350000
2015 300 528000 592000 490000 32000 35000 400000
2016 260 500000 482000 470000 30000 31000 390000
2017 200 480200 450000 440500 29000 300000 380000
Cost & Revenue:
Cost is the lowest total expense needed to produce each level of output. When quantity rises, total
cost also rises. Cost is of two categories namely, fixed cost and variable cost.
Fixed cost (FC) represents the total expense that is paid out even when no output is produced;
fixed cost is unaffected by any variation in the quantity of the output.
Variable cost (VC) represents expenses that vary with level of output – such as raw materials,
wages, and fuel – and includes all costs that aren’t fixed.
Total Cost (TC) = FC + VC

Whereas revenue is the sum of total cost and profit.

Revenue = TC + Profit

VC TC Price TR AR MR Profit/Loss
1500 6500 700 0 0 0 6500
2000 7000 900 900 900 900 6100
2500 7500 1000 2000 1000 1100 5500
3000 8000 1500 4500 1500 2500 3500
3500 8500 2500 10000 2500 5500 1500
4000 9000 3300 16500 3300 6500 7500
4200 9200 3800 22800 3800 6300 13600
4500 9500 4500 31500 4500 8700 22000

Market structure & competition:

 The company falls under the oligopoly market form and it is perceived mainly from its demand
elasticity
 Jai Shree Ram has a monopolistic market structure

Features of Monopolistic Competition:

1. A Large Number of Sellers:

There are large numbers of firms selling closely related, but not homogeneous products. Each firm
acts independently and has a limited share of the market. So, an individual firm has limited control
over the market price. A large number of firms leads to competition in the market.

2. Product Differentiation:
Each firm is in a position to exercise some degree of monopoly (in spite of large number of sellers)
through product differentiation. Product differentiation refers to differentiating the products on the
basis of brand, size, color, shape, etc. The product of a firm is a close, but not a perfect substitute of
another firm.

S.no Features Monopolistic

1 Number of firms Many but not large
2 Nature of product
3 Price Elasticity of demand for an Large
individual firm
4 Entry Easy Entry
5 Profit Abnormal profit or loss in the short
run and normal in long run.
6 Selling or promotion cost Very Essential
7 Price Policy Price Making

Conclusion:

The company analysis we conducted for our project enhanced our understanding of the
microeconomic concept.
The company's data provided us with information regarding the demand and supply of its product,
the elasticity of demand, demand forecasting, the equilibrium concept, and the breakeven point. In
addition, the company provided us with this decision-making strategy alongside their previous
decision-making strategy example. We were able to understand the market structure that supported
the business.