2)How does the availability of substitutes affect purchasing decisions?
3)How does a surplus or a shortage of a good or service affect the market price? How does global economic competition impact the duration of surplus/shortage condition and price elasticity in the domestic market?
Please explain and respond in your own words. Thank you in advance.© BrainMass Inc. brainmass.com September 23, 2018, 6:33 am ad1c9bdddf - https://brainmass.com/economics/utility/surplus-or-a-shortage-of-a-good-or-service-70661
1)What role does economics play in our personal decisions? What role does economics play in the organizational decisions?
As to our personal decisions, we usually need to solve the utility maximization problem given budget constraint. Such as, how do I max my total utility by choosing different bundles of bread and milk, given the amount of money in my pocket. The economic model shows that we can max the total utility by choosing MU1 / P1 = MU2 / P2.
As to the ...
Discuss the availability of substitutes and its effects.