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arguments against monopolyhowever monopolies have been accused of the following weaknessesdiseconomies of scale while the monopolistic firm can
monopolistic practicesthe following practices may be said to characterize monopoliesexclusive dealing to supply and collective boycottproducers agree
realism of perfect competitionthe assumptions of perfect competition are obviously at variance with the conditions whichactually exist in real world
disadvantages of perfect competition there is a great deal of duplication of production and distribution facilities amongst firms and consequent
advantages of perfect market it achieves subject to certain conditions an allocation of resources which is socially optimal or economically efficient
normal and supernormal profitsnormal profit refers to the payment necessary to keep an entrepreneur in a particular line of productionin economics it
perfect competition the model of perfect competition describes a market situation in which there arei many buyers
market structuresthis refers to the nature and degree of competition within a particular market capitalist economies are characterised by a large
marginal revenue mrthis is the increase in total revenue resulting from the sale of an extra unit of output thus if trn-1 is total revenue from
average revenue arthis is the revenue per unit of the commodity sold it is obtained by dividing total revenue by total quantity sold for a
marginal costthis is the increase in total cost resulting from the production of an extra unit of output thus if tcn is
factor combination in the long runin the long run it is possible to vary all factors of production the firm is therefore restricted in its activities
relevance of the law of diminishing returnsthe law of diminishing returns is important in that it is seen to operate in practical situations where
where does the firm operatethe firm will avoid stages i ii and iii and will instead choose stage ii it will avoid stage i because this shall
characteristics of the three stages stage ihere the total physical product average physical product and marginal physical product are all
the law of diminishing returns law of variable proportionsone of the most important and fundamental principles involved in economics called the
equilibrium in a two commodity marketlet us consider a two-commodity market model in which the two commodities are related to each other let us
buffer stocks and stabilization fundsin this case the government buys up part of the supply when output is excessive stores this surplus and resells
perfectly elastic supplysupply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand the demand curve has
elastic supplysupply is said to be price elastic if changes in price bring about changes in quantity supplied in greater proportion thus when
unit elasticity of supplysupply is said to be of unit elasticity if changes in price bring about changes in quantity supplied in the same
inelastic supplysupply is said to be price inelastic if changes in price bring about changes in quantity supplied in less proportion thus when
perfectly inelastic zero elastic supplysupply is said to be perfectly inelastic if the quantity supplied is constant at all prices the supply
importance of cross elasticityknowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to