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Allocation Function
The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market. If price moves in a technique that indicates an increase in requirement, more firms may try to enter that market and gives a supply to meet that requirement. Conversely, if price shifts in such a way that demand looks to be diminishing, several firms may choose to leave the market and direct their resources elsewhere.
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How economic theory explain optimum pattern of consumption for an individual consumer
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Suppose the demand curve for a consumer for coffee is: Q = 6 – 2P, where Q represents the number of cups per day and P is the price of coffee per cup. Question: Suppose the
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