The individual’s budget constraint
As individuals are utility maximisers, each person seeks to be on an indifference curve as far away from the origin as possible. The extent to…
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Utility maximisation subject to a budget constraint
For a consumer with a limited income (and that is all of us once our work-leisure choices have been made), the best or efficient allocation…
The efficient allocation of a consumers budget
We have just seen how a utility maximising consumer allocates a budget between two goods. It is possible to generate a simple rule from this…
DERIVATION OF THE SLOPES OF AN INDIFFERENCE CURVE AND A BUDGET CONSTRAINT
Consider one indifference curve. Let the individual consume a small additional amount of x. The effect of this on total utility is given by the…
Price changes and an individual’s demand curve
We now demonstrate that if a good rises in price, the quantity demanded of it is likely to fall. A geometric analysis of maximising utility…
The substitution and income effects of a price change
Although a consumer’s demand curve for any good x is likely to be downward sloping we cannot be certain of this because of the presence…
From individual demands to the market demand for a good
To this point , our focus has rested entirely on the individual consumer. For economic and business analysis, though, it is market demand that matters….
Macro Environment
The macro environment consists of the societal forces that affect all the sectors in the company’s macro environment namely, the demographic, economic, natural, technological, political…
MicroEnvironment:
The microenvironment consists of the actors in the company’s immediate environment that affects the performance of the company. These include the suppliers, marketing intermediaries, competitors,…
Internal Environment
The important internal factors which have a bearing on an organisation include: Value system: The value system of the founders and those at the helm…