DQ1 Essay Example | Topics and Well Written Essays - 500 words - 6

DQ1 - Essay Example Consumers decide about the goods and services they prefer to purchase while the objective of business firms is to decide on how to produce products and the variety of products to be produced. Government entities aim to provide public services and decide on the methods to finance them. The behavior of these varying sections of the society may be termed as purposeful behavior in terms of managing resources and finance, though it may be noted that institutions and people are not free from faulty decision making because decisions are influenced by emotions and by people around the decision maker. Economists consider the marginal analysis while decision making; a comparison of marginal costs and marginal benefits. In this context, marginal means additional, extra or a change in. For example, economists analyze whether a business should reduce or expand or whether the government should increase or decrease funds for a particular cause. A rational decision maker must compare both marginal costs and benefits while making a choice. Economics gives significance to scientific methods to observe consumption behaviors and outcomes and derives hypothesis (cause and effect), tests and modifies the hypotheses using facts and finally evolves it into economic theories or principles that predicts the outcomes of specific actions. Therefore, it is important to study economics, because economics concerns with theories and methods that support facts about how institutions and individuals essentially behave in producing, consuming and exchanging goods and services and thereby find a logical balance while consuming the available resources in this world (McConnell 2005 p.4-6). The sacrifice made by the society to acquire more of one product and when the society forgoes the chance of availing the next best thing, the sacrifice is called the opportunity cost of choice. Every option includes marginal benefits because of marginal costs (scarce resources). While making a reasonable

Assignment Example | Topics and Well Written Essays - 1250 words - 21

Assignment Example Besides carbonated drinks, the market has had an influx of fresh juice owing to the increasing life awareness campaigns vouched y the government in order to increase effective lifestyles in the country. The consumption of soft drinks is definite with the growing number of competitors in the country validating the viability of the market. People consume soft drinks alongside other meals and when relaxing. Soft drinks are therefore a pertinent compatriot sustaining any form of social gathering. Additionally, people prefer soft drinks during meals times’ thereby increasing demand for the same products. Among the factors influencing the purchase of soft drinks are the pricing of the products, the type of the products and packaging among many others. Price is a fundamental marketing element that most consumers of the products consider before purchasing a product. The prices of commodities often vary depending on the quality and size of a product. Most of the soft drinks manufacturing companies price their products depending on the raw materials used in the manufacture of such products and the packaging of the same. Carbonated drinks are cheaper than fresh juices. However, fresh juices have smaller packaging as the vendors diversify their products packaging in order to cost lesser than the carbonated soft drinks. Most home based consumers purchase larger bottles of the soft drinks. This explains Coca cola and Pepsi’s decision to diversify the packaging of their products to two liters. Such large products are economical and ideal for families. Fast food consumers on the other hand prefer smaller packages such as a half a liter. The manufacturers of such drinks including the two have therefore diversified their packaging thereby capturing both markets in a bid to increase their market share. The trend has succeeded thereby facilitating the two companies’ large international market shares. However, with the develop ment of local brands and the prevalent of fresh