WALJAT COLLEGES OF APPLIED SCIENCE (BIT-MUSCAT) CASE STUDY The law of Demand in a city of Gujarat Lekshmi S Nair MBA/50026/11
Among the many environmental problems faced by Indiais how to dispose the vast amounts of garbage generatedeach day by households and businesses
One small community in Gujarat used The LAW OFDEMAND to ease its garbage collection problem Residents of this city were paying an annual fixed fee of Rs.120 per resident for a daily average of 2.2kgs
For example: 40kgs Rs.10 was sold for:The citymunicipality begancharging by the bagfor garbagecollection. The cityrequired all trash beplaced in specialbags sold by Thus the marginal costmunicipality to residents of generating additional trash increased from 0 - 25paise per kgs
The municipalityintroduced a recyclingprogram. Eachhouseholds was givenbuckets to be filledwith cans and bottlesthat were picked upevery week. The cityalso arranged fornewspapers to becollected once amonth.
Definition of Law Of DemandA microeconomic law that states that, all other factorsbeing equal, as the price of a good or service increases,consumer demand for the good or service will decreaseand vice versa.
The result was predictable – people began to dump less trash. During the 1st year the trash collections per person declined to less than 1kg per day.The citizens benefited because they paid about 50 % lessthan before and the municipality also reduced its garbagecollection costs.