Toanspo%d coun Ecmomics

4 Enqin eemnq Ecmmy CpToblem solUing acvUy)

SysBemutic ecu uahm 3f economic merirs o
oupotd solwhcn to eq pouplem

A BPainciples g Enqineaing conumy

a) develop altemahves
b FoCUs m dLthentes
c)Cons1s h0n vew po
d) Commm mt o meesuor CuSD)
e Releuonm Ca les1a
t ) denthy anskå i s miiqcuhun
9) Reui It the declnon s

eDesicm paucesS
a Paoplem ecoqnisah
bfeaslble alkeoncuhves
e) OuCome d cash fluw
selechcn otes 1n
9 Anays1s & Compasm
h seleckm 4 poelorrd alknauh
Peaesm cm te Mon1raia 9
d Sneudshees
a) CmssB shucyse bfmuahan eporamele thamae-
d) Gcqph.cal ouhput
cial
rne
bilit

mic Spply_& Oemcmd

Co
12
Moctel
Ast
De-
fundamemtal_ Concept of edunomics
wh Demomc - How much oty
lD Demamd
N)
aelaBmship: pce 6 aty
Suppy-(mate Con
otte)
W
vuanhlysupplied
v 2elahon beh demcmcl
co
A VI Resouates Cam supphy-feaces behind sesourus
inv alllocale m mae efhclet way
Th
42 The
an
Th
law oE Demam d
9)_hiohor me_ p21ce
mii less _he dlemand
h b oppoe Hymihy Cost
he ot buymq_quud is hiqh-
Ite c)Atsesult- AOId buyinq 6
O
spmcd somen e ke
on
P
demcmd velalms
C P3
a
P
3 Quonki

The demanc rela Hnshp

cuove shows (ve) 3elahm
pice demamc bun
iqhes poice Lower clemcmc
Louspolce mase demamcl

actical reasons the

monetary unit is chosen for this nurnad
b Lawo Supply
hinahaelaicim yupp'

P 5pp

P2

High es the poite Hiqher dne qty suppled

Selling a high poice - suppy mae becaus d h i a h e r

rev euL.
P1ce o-Pm oy su pped
10
so

supy & pemam aelahonsnp

C D = RS Ro - Dem cmd 20
nly ppudute o

CD Rs 20 Poocduce 30 Dem ond RO

them polce of lettouer Cos coop
Lower mce then mctlce co auailabe to peo p)e
Ocwhom Cwho ade cicled oppnhun ih scS

1s high 20|-
Eguiuboum
S9pply & demamd aoe equl
cuhat demanclecl
)aMmoUml oL qood supplied exac
3EveaqUme ls sats hecl
sahshecd yabue cmc Comsumor qet
4) oodutes qet
allthey demomclecl
poke

Equt bIum.
P

a
DISequuliuum
whenei the pmce o7 quanHty 1s not eqcel do

xeess SURPy-
Tohal supply
1f the pce 18 se foo
P
hlghe x c e s s supplywi)b e
creaed wIn_eConomy

-Exess Supp
2
 xcess Demam d
Chen plce 1s set belouw
equelibium »e

demo

2
Comsumer Compehe for ny \he q0od- hat

mace me up

Monqince bemeA (os)

J s an adduhomal saisfackom uHllly *n Ct
67

a Q peason xecieues hom Consuminq add1huncu quods 0

Uce
Marqma beneht 1s m a x amount he s cullmg to pay

Fo acdclimadd quod o Scaulce

decaeces Qs Consumpncn 1ncacoES:
Mcoqmcu bene fit
Consumer Sunplus
-wllmoya

CUnsumGT SuTplus

acul Pu. P2 Axca ABC

2
Value to buyer - Amount pard

by buyo

he diFF bes he toHal amoum consum will\noq O

psY
ancd totd amoumt
they ackuady puy.

prucduce Suoplus

acddihma)
suaplus
P2t goudu T susplus
neu d u uwr
P
durey
Srplys

amout zecieUed by_xller- Cost to seller

To tol Surplus -Consu m r SunpluS + Producer Sur plus

Total S uoplus

A
.Comsu6ns
SUpluAS

Cqul boun

roodu cdo
SuTpluS
D

Epfect of Tax
prebuyer

pays Sma) Tay

dedelweqlsss
Medum To
P2
512
turoe Te
pce selles qecieue
Ot
P

2 C2
At B+C
Tax Reuenue Cons Suplus
T s12e oF Tax psod Su D+E +F
Totau 3ur « A+ 840+D+EtF
ty ot quocd solc

T CO qout tox devenue. chanae -(C+E)

Areq (CHE) shows fal in total Srplus.( Deadweiqht Loss)

Deadweiqht loss 6 Tax Reuenue

tax rade » deddwenqh loss a1ses

9 1mczeas In

b S mal }ax Bpah seuenue qsocaw

dx qoo TeEvenuR fel

) fax Tuenue qrow s n e o t he ex
fex qe lonqr > maralce shank * a x zevemue a l l s
e

OLalAccouning Soci&Snv.efteck o opacm1schn

Bo cLclLhid
12 FSt pimaay accountmqsimlca
QLcoUnHnq-
) Calccu cele the Compamys peafemcme
wPoea pmcne 1s Ue fo mclude socla & EVoyeil
etee

oimayPaposR_OE SocLaAc
Foamwolc Pes Onqoinq MUnuanqpeualiucchen6
accounqb1lly to sBqkehalcdors
Help to nvehqale he peatsmme
(sociat AucttB Newose
Accordunq oSAN 0CIal accounbnq shuulcbe
a) Mu_peospecHye
b) CompreheDS)Ve
c )Compasatye
d eequla
V
e vehed
D
PLsclose
objechves ot so cla a cocuhnq
Efteche Wlisahom o ntural oesouaces
A Help Bo enmployeeS
So cley
CushomerS
S) I- nveslod

Gehng Recudy
T emphasizes the necçl feo your xcmi sahm }o
make a clean Comm)}Eme SAB

Elastieiy ot Demamol
T e f e r s to how sens1hve he
clememd fer cqood
i Js to chcmqe fne ohr ecanarm)c
romables ad Comsumer
mcom
Demand elashci Ay = chamqe in he quanHhy demg icled
elasic
% chamge m ohe economic vavabie

Hqhor demand elashcihy Cmsumer de mo»e Jispons)e

fo chancje 1n his vaoicable

PoicelqshciM Demamd CPED)

m e a s o e s he esponsyenecS o demoncl afler
Chcmqe in qoods oan poce
 o Chance 1n aly demamde
Elqshc Dem md
chamge m paice.

Elashaticihy.
Numeaic Uelues of Coehciert o l poce

inelashc
is perfectly
OI Pecl =o demamd
S3

P3 S Consumo will)na

P
Dpayeny pa1ce
ea moducs
P
vem c In

P e Ped= Un1tory piicoelashcty

SS
chanq e in palce
m e cwJh_pOpoahcmcte
PT
chomqe n clemancl
P

Q2
Ped Ped >1» Elashc demamd
Loss of revemue
P
P2
mcrease
eU enue r o
Slinq moe ak

C 2

P e d <1 Inelashe demamc

P
1norease
6elng
high pe
P -TeUenre loss

12
Ped =mn1n1ty. PertecHy elashc
2
chamq e 1n marce} suPPY
P hot Chomqe in e
quilhhum

HJeA l
UseRdness oPED feo ocluch0m
T helps Jo pmeclic+
D To:a aeuense TR

2Palce volatill P
3 Effec1 mdnect tox IT

4 Pce cliscalminahcn PO

ooss paiee Elashchy of Demand Xed)

+mecSUnes arspmsveness o t demamd fes
qood xfollocwng chonqe in_prce o q relakcd qood y

XED
chamge in_Pice X
chomge mdemome y
Coeft dPec=/x
Ctve - -
-.
Weqk SqbsH u )
-ve - .
tlose gomp)emend)
 FRST

Close Subshlue wedle Subsle

Smal1X 1n

D
P2 P2

a q e 1sK
Pz Smal
dem onOA
demonl

close Comp)emon Wealc Complemout

Small feul looqe hop 17

In e

P Pa
Small l s
loqe ISR ottmemcl
In odemono