The law of Demand in a city of Gujarat

WALJAT COLLEGES OF APPLIED SCIENCE

(BIT-MUSCAT)

Lekshmi S NairMBA/50026/11

CASE STUDY

Among the many environmental problems faced by India is how to dispose the vast amounts of garbage generated each day by households and businesses

One small community in Gujarat used The LAW OF DEMAND 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

The city municipality began charging by the bag for garbage collection. The city required all trash be placed in special bags sold by municipality

For example:

40kgs was sold for:

Rs.10

Thus the marginal cost to residents of generating additional trash increased from 0 -25paise per kgs

The municipality introduced a recycling program. Each households was given buckets to be filled with cans and bottles that were picked up every week. The city also arranged for newspapers to be collected once a month.

Definition of 'Law Of Demand'A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and 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 % less than before and the municipality also reduced its garbage collection costs.

Keep UR city clean for a better TOMORROW