1)The Law of Demand is the first rule I'd apply to my company. According to this theory, if other variables remain constant, the amount desired of a good or service decreases as its price rises. Knowing this concept as a business owner might help you set prices. The second principle I would use with my business making Rational Decisions. In order to make specific decisions in business, you must have a purposeful, rational thought process. Incentives in various forms is another principle I would apply to my business.

2)People responding to incentives is the principle of economics that I think would be most likely to apply when making business decisions. For example, getting items in stock that you could sell at a sale price. It is perceived as an incentive and helps drive up sales.

Based on these two-scenario draft two separate connections between the different principles and the role of microeconomics in everyday life.

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Answer Scenario 1 Connection between the Law of Demand and Rational Decision Making As a business ow... View the full answer