Foundations of Economics

Agenda
Introduction
2. Non-price determinants of Demand
3. Non-price determinants of Supply
4. Price elasticity of Demand
5. Income elasticity of Demand
6. Cross-Price elasticity
7. Recommendations

"TURON BUG`DOY UNI"
"Diamente group" Uzbekistan is largest flour producers in the market since 2015.
The company started their business with 5000$.
This products is normal good.
(Adulhikmat [phone])

"Turon bug`doy uni" supply
100% markets, supermarkets, hypermarkets
70% of small shops
40% of shops in the regions
(Adulhikmat [phone])

1
Non-Price determinants of Demand

/08
Non-price Determinants of Demand:
Seasonality
* Increase in demand during wintertime
(Sloman, J. and Garratt, D., (2019)

Non-price determinants of Demand:
Consumer Preference
*Decrease in demand during summertime
(Sloman, J. and Garratt, D., (2019)

Non-Price Determinants of Supply
03

Non-price determinants of Supply:
Price of resources
The price of resources is a major factor in the rising cost of production
(Sloman, J. and Garratt, D., (2019)
Blue line is previous demand curve. (Qs1) Orange line is leftward shift- (Qs2)

01
Non-price determinants of Supply:
Technology
(Sloman, J. and Garratt, D., (2019)
Blue line is previous demand curve. (Qs1) Orange line is leftward shift- (Qs2)

Elasticity of Demand
04

Price Elasticity of Demand
Quantity demanded=
7 %
Price = - 8 %
E dp= -7/8= - 0,87
“Mid-pint” method : ∆QmidQ/ ∆PmidP
-1 < E dp<0
Inelastic demand
(Sloman,J. and Garratt,D., (2019)

07
Price elasticity of Demand
(Sloman,J. and Garratt,D., (2019)

(Sloman,J. and Garratt,D., (2019)
The formula for income elasticity is: ∆QsQs /∆P/P
Income Elasticity of Demand
Quantity demand = 0.2
Income = 0.16
E dp= 0.2/(0/16)=1.25
-1 <0< E di
Normal good

Income Elasticity of Demand

Cross-price elasticity of demand
Edc=∆Qx/∆Py
Edc=∆Qx/∆Py
0< Edc substitude
Quantity demand (turon)=0.16 (16%)
Price (motabar) = 0.11 (11%)
(Sloman,J. and Garratt,D., (2019)

10 40 70 100 130 160
In tonnes
In tonnes
0 20 40 60 80 100 120 140 160
310
290
260
230
200
Price in 1000sums
Price in 1000sums
280
260
240
220
200
Cross-Price elasticity
Turon
Mo`tabar

05
Recommendations

Attracting people with gifts.
Giving a certain amount of yeast if customers buy 50kg flour.