.Identify & explain the following concepts from the given illustrations.
1) Bhushan refused to eat fifth chapati after eating four chapatis.
2) Gauri collected the information about the income of a particular firm.
3) A monopoly firm can exercise considerable influence on the supply of its commodity
and thereby its price.
Answers
1) Bhushan refused to eat fifth chapati after eatingfour chapatis. Explanation: After reaching the point of satiety, a rational consumer should stop his consumption since the maximum limit ofsatisfaction is reached and there is no addition to total utility by any further increase in the stockof a commodity..
2) Microeconomics is the study of the behavior of small individual economic units, like individual firms, individual price, individual household etc.
3) A monopoly (from Greek μόνος, mónos, 'single, alone' and πωλεῖν, pōleîn, 'to sell') exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market.[1] Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit.[2] The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices.[3] Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).