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For the purposes of economic analysis, a normal profit contains the cost of the lost opportunity of the next best option allocation of the firms resources. In a purely competitive world, a business should be able to cover their costs of production and the opportunity cost of the next best option (and nothing more in the long-run). In an accounting sense there is no benchmark to verify whether the resource allocation was wise. Instead various financial ratios are used to verify how the firm has done with respect to same situated companies.
What actions could a government take in order to keep the price above market equilibrium? There are four basic possibilities here; 1) Minimum price; 2) A tax on the good
Employee Communication More widely called internal communications, employee communication is must in retaining a happy and productive workforce. Internal communications to e
define opportunity cost and how it is useful in managerial decision making?
Explain the how the classical school views the role of markets and government intervention in fighting business cycles The classical school believes in the smooth functioning o
What are the Policies and Long-Run Growth In many concerns it is decidedly odd that world distribution of output per worker is as unequal as it is. Migration, World trade and f
what are the uses of cross elasticity quantity in demand/
I would tend to think that a 5% per year goal is more reasonable. Smaller incremental goals always appear to be more attainable, while more radical goals may actually be more diffi
What is indifference curve and its properties?
National Budget: A National Budget is a document showing estimates of expected government revenue and intended expenditure for the coming financial year. It usually consist of
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