Application of Economic Concepts

Application of Economic Concepts

The study of economics leads to the understanding of various concepts that are important in the daily lives of individuals. There are various concepts that one can apply and benefits greatly from the situations that occur on a day-to-day basis. This paper addresses how one can benefit from various economic concepts.Application of Economic Concepts

The first concept is demand, which shows the amount of product required in the market and the effects that the same has on other concepts. The law of demand states that when there is higher demand, but supply remains the same, then prices rise. Higher prices mean that individuals spend more on products and services that they wish to buy. This deducts a significant amount of income of individuals, which could have been saved. One can save a lot by understanding how the demand and supply changes.

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For instance, on peak shopping days, the demand for goods and services is very high. Therefore, during holidays, such as Christmas, the price for products, such as clothes and food, rises, and this means that one has to spend a lot of money buying various products. Although retailers increase the supply of products, the demand is so high that there is pressure for prices to rise, and this means that customers have to pay more. Alternatively, one can do their shopping when the demand is low, long before holidays. During September and November, one can buy gifts and do other shopping that they will need in December. They can then stock the goods until December, so that they can use them during the festive season, when everyone is busy shopping. Such option also presents a time-saving opportunity, because the lines in various retail shops are long, and one has to wait for a long time before they are served. One can also be sold poor quality products, especially considering that many people may have chosen to shop earlier, so the products of the best quality have been already sold.

The same case applies to the service sector, where airlines and hotels are keen to meet their target revenues for the year. They make best efforts to ensure that the peak season is well utilized to achieve the set financial targets. The flight and hotel charges are very high during peak seasons, since a lot of people choose this time to take their holiday. If one decides to take their holiday during the off-season, they are likely to be charged low prices for products and services. They are also likely to have a greater choice in terms of the airlines that they can use and the restaurants that they wish to book. Since there is competition for a rare customer, airlines and restaurants offer discounts and lower their prices so as to attract traffic. One can also choose the hotel rooms that they like, since most of them are empty, and the companies wish to make revenues. Companies also want to ensure that best quality services are delivered to customers as a marketing strategy as well as an attempt to ensure the highest level of satisfaction in customers. In the end, the customer benefits. Application of Economic Concepts

It is also possible to profit during peak seasons by selling the products that customers need urgently. After identifying the products that customers demand a lot during holidays, as well as services that they need, one can then stock them in large quantities and start a temporary business during holidays, which can generate a lot of income. For example, children like playing during holidays a lot. It would be easy to start an event management company that operates during the peak season, where children are provided with various equipment that they need for playing. As children’s parents pay for the services that meet this demand, one can generate enough revenues. If the demand remains high, one can charge a premium price depending on the games that children wish to use during the events. It is possible to hire individuals to manage the event, and this can be a great source of income.

There are also seasons when various products are available in large quantities, especially when it comes to food. At certain times of the year, food is harvested and is readily available in the market. According to the supply concept, the excess supply exerts pressure on the prices to fall, and this means that various products are available at very low prices. For an economist student, it would be prudent to buy such products in large quantities and stock them, so that, when the prices are high, one would have no pressure to buy the products at high price. The use of price fluctuation in the market in such manner allows to save money. All that one needs is understanding the market processes so as to identify the right timing to achieve the greatest benefits.

One can also avoid inconveniences while seeking simple services in various institutions by evaluating demand for such services at a particular time. Such services include, for instance, banking services, such as withdrawing funds from the bank. It is obvious that people demand various banking services at the end of the month, when they are usually paid. This means that there are long lines in banks, as people rush to obtain such services. The concept of demand, in this case, can guide one to seek banking services during the time of the month, when people have not been recently paid, especially, in the middle of the month. Since there are only a few people seeking services at the time, it is obvious that one will spend a shorter period in the bank as compared to seeking the services at the end of the month.Application of Economic Concepts

Carrying out responsibilities at the right time is also important in saving time. An example is the filing of tax returns, where people are required to file returns before a certain deadline. It also relates to when individuals are doing assignments. Close to the deadline, many people try to complete the tasks, so that they avoid the consequences of failing to meet the deadline. This means that the websites, where people are expected to submit the returns or submit the assignment, are very busy because of the demand for the services from the websites. This means one has to wait for a long period before they can complete the tasks. Doing such duties early helps avoid such rush and pressure.

In conclusion, demand is one of the concepts that one can use in their daily lives to ensure that they benefit or avoid the adverse effects of doing it at the peak periods. One can save income by buying products and services during off-seasons. This approach also saves time, because customers do not have to wait for a long time before they can receive services. One can also make the decision to provide some services and products that are highly demanded during peak seasons so as to benefit and make huge income from the situation. One just needs to be well informed about when the peak season and off-season arrive. Application of Economic Concepts