In day-to-day life we need various goods and services. It is said that human wants are unlimited but it is not possible to fulfil all the wants with given resources and means. One thing has to be clearly understood that every want, need or desire cannot be termed as demand. Demand in economics means effective demand, that is one which meets with all its three crucial characteristics, viz. desire to have a good, willingness to pay for that good, and ability to pay for that good.
The term ‘demand’ for a commodity (i.e. quantity demanded) always has a reference to ‘a price’, ‘a period of time’ and ‘a place’. Any statement regarding the demand for a commodity without reference to its price, time of purchase and place is meaningless and is of no practical use.
A meaningful statement regarding the demand for a commodity should, therefore contain the following information:
(a) The quantity demanded
(b) The rice at which a commodity is demanded,
(c) The time period over which a commodity is demanded, and
(d) market area in which a commodity is demanded.
The demand for anything, at given price is the amount of it which will be bought per unit of time at the price.
Demand refers to the quantities of a commodity that the consumers are able and willing to buy at each possible price during a given period of time, other things being equal.
Demand is the ability and willingness to buy specific quantity of a good at alternative prices in a given time period, ceteris paribus.
*ceteris paribus – it means with other conditions remaining the same.
Demand means the various quantities of goods that would be purchased per time period at different prices in a given market.
The demand for goods is schedule of amounts that buyers would be willing to purchase at all possible prices at any instant of time.
Determinants of demand
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Types of Demand
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Utility Analysis – Cardinal and Ordinal Concepts of Utility
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Click on the link below for notes on Demand Elasticity
Click on the link below for Notes on Demand Forecasting
National Income – Concept, Types and Measurement
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Inflation – Concept and Types
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Measurement of Inflation
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Business Ethics – Meaning, Definitions, Theories, Sources and Importance
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Corporate Social Responsibility (CSR)
Corporate Social Responsibility is defined as “a commitment to improve community well-being through discretionary business practices and contributions of corporate resources.”
In broader sense CSR is concerned with that is- or should be – the relationship between global corporations, governments of countries and individual citizens. More locally the definition is concerned with the relationship between a corporation and the local society in which it resides or operates. Another definition is concerned with the relationship between a corporation and it’s stakeholders.
Principles of CSR
This is concerned with the effect which action taken in the present has upon the options available in the future. If resources are utiltised in the present then they are no longer available for use in the future, and this is of particular concern if the resources are finite in quantity. Sustainability therefore implies that society must use no more of a resource than can be regenerated. Viewing an organization as part of a wider social and economic system implies that these effects must be taken into account, not just for the measurement of costs and value created in the present but also for the future of the business itself. Measures of sustainability would consider the rate at which resources arc consumed by the organisation in relation to the rate at which resources can be regenerated. Unsustainable operations can be accommodated for either by developing sustainable operations or by planning for a future lacking in resources currently required. In practice organisations mostly tend to aim towards less unsustainability by increasing efficiency in the way in which resources arc utilised.
This is concerned with an organisation recognising that its actions affect the external environment, and therefore assuming responsibility for the effects of its actions. This concept therefore implies a quantification of the effects of actions taken, both internal to the organisation and externally. Accountability therefore necessitates the development of appropriate measures of environmental performance and the reporting of the actions of the firm. This necessitates costs on the part of the organisation in developing, recording and reporting such performance and to be of value the benefits must exceed the costs. Benefits must be determined by the usefulness of the measures selected to the decision-making process and by the way in which they facilitate resource allocation, both within the organisation and between it and other stakeholders. Such reporting needs to be based upon the following characteristics:
Understandability to all parties concerned:
• Relevance to the users of the information provided:
• Reliability in terms of accuracy of measurement, representation of impact and freedom from bias:
• Comparability, which implies consistency, both over time and between different organisations.
Transparency, as a principle, means that the external impact of the actions of the organisation can be ascertained from that organisation’s reporting and pertinent facts are not disguised within that reporting. Thus all the effects of the actions of the organisation, including external impacts, should be apparent to all from using the information provided by the organisation’s reporting mechanisms. Transparency is of particular importance to external users of such information as these users lack the background details and knowledge available to internal users of such information. Transparency therefore can be seen to follow from the other two principles and equally can be seen to be a part of the process of recognition of responsibility on the part of the organisation for the external effects of its actions and equally part of the process of transferring power to external stakeholders.
Some of the benefits of being socially responsible include
(a) Enhanced company and brand image
(b) Attract and retain employees easily
(c) Increased market share
(d) Lower operating costs and
(e) Attract investors easily.
A socially responsible firm cares about customers, employees, suppliers, the local community, society, and the environment. CSR is described as an approach by which a company:
(a) Recognizes that its activities have a wide impact on the society and that development in society in turn supports the company to pursue its business successfully.
(b) Actively manages the economic, social, environmental and human rights.
This approach is derived from the principles of sustainable development and good corporate governance. Managers within different firms see some social issues as more relevant than others. The relevance of a given social issue is determined not only by the company’s products, promotional efforts, pricing and distribution policies but also by its philosophy of social responsibility.