The business world is very susceptible to the subtleties of consumer choices. The ability to anticipate the trends in consumer consumption patterns is vital to any company desiring to be a leader or major factor in their industry. Millions of dollars are spent each year in research and analysis to determine or to create trends in, not only who the company's customers may be, now and in the near future, but also, what will those customers want to buy, and why.
Truly to understand trends in consumption patterns, one must first understand the basic principles of economics. Some of the key terms that will be discussed during this course will be:â¢Economics: According to Colander (2008), "Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society." (Colander, 2008, p. 4)â¢Microeconomics: Colander defines microeconomics as, "the study of individual choice, and how that choice is influenced by economic forces."
The illustration that accompanied Marshall's origi...
Perfectly inelastic demand
Perfectly elastic demand(Colander, 2008, p. 14) Microeconomics looks at how an individual decides what to buy and where or what to sell and for how much.
â¢Laws of Supply and Demand: Relationships exist between what people want and what people or businesses supply, which are called the basic laws of supply and demand. The law of demand is an inverse relationship to the price of an item, as the price falls the quantity demanded will rise, assuming all other things remain constant. (Colander, 2008, pg. 82) The law of supply, "is the mirror image of demand⦠quantity supplied rises as price rises, other things constant." (Colander, 2008, pg. 88)Many believe that people buy things for their own self interest. Sales courses indicate the need to know this self interest because the customer truly is not buying their product. The actual...