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q what do you mean by market structuremarket economy pricing is conditioned by market structure there are various forms of market structures perfect
q describe the gift exchange model of reciprocitygeorge akerlof 1982 develops a gift exchange model of reciprocity in that employers offer wages
q explain the leibenstein modelleibenstein 1966 sees a firms norms or conventions dependent on its history of management initiatives labour relations
williamson wachter and harris 1975 suggest promotion incentives within the firm as a substitute to morale-damaging monitoring where promotion is
q explain the efficiency wage modelefficiency wage models such as shapiro and stiglitz 1984 suggest wage rents as an addition to monitoring because
if a firms organisational characteristics have not any implications for its behaviour or more possibly have implications that can be taken into
the significance of behavioural approach is difficult to assess it provides useful insights into some aspects of business behaviour march and cyert
q central characteristics of simon satisfying behaviour modelthe pattern of policy commitments which result from the bargaining process can be seen
q simon satisfying behaviour modelthe behavioural approach as developed in particular by richard cyert and james g march of the carnegie school lays
for oliver e williamson existence of firms derives from asset specificity in production where assets are specific to each other such that their value
q analysis of team productionharold demsetz and armen alchians analysis of team production is a clarification and amplification of earlier work by
q illustrate about sales maximisationthe concept that business firms specifically those operating in the real world are principally goaded by the
q product of marginal revenuemrpl is the product of marginal revenue and marginal product of labour or mrpl mr x mplbull derivation mr trqmpl
q describe mrpl and profit maximisationthe common rule is that firm maximises profit by producing that quantity of output where marginal revenue
q explain mark-up pricingin addition to using above methods to conclude a firms optimal level of output a firm can also set price to maximise profit
q example on changes in fixed costs and profit maximisationwhat if arena owner in the illustration above triples the fee for the subsequent concert
q show the changes in fixed costs and profit maximisationa firm maximises profit by operating where marginal revenue equals marginal costs a change
a promoter decides to rent an arena for concert arena seats 20000 rental fee is 10000 this is a fixed cost the arena owner gets concessions and
q explain maximising revenue methodin a number of cases a firms demand and cost conditions are such that marginal profits are greater than zero for
q define profit maximisation theoryprofit maximisation theory defines that firms corporations orcompanies will establish factories where they see
q describe managerial and behavioural theoriesit was only in 1960s that neo-classical theory of firm was disputed by alternatives like behavioural
q show the example on transaction cost theorycoase begins from standpoint that markets could in theory carry out all production and that what needs
q describe about theory of firmtheory of the firm is associated to comprehending how firms come into being what are their objectives how they act and
q what do you mean by theory of firmmicroeconomics especially the theory of firm assumed importance and attracted considerable attention in the early
q what is external diseconomiesthe expansion of an industry is likely to generate external diseconomies that raise the cost of production an increase