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The basic concepts of price theory
What is the theory of absolute and comparative advantage?
Average Total Cost (ATC): ATC is the total cost per unit of output. ATC = TC/y = (TFC + TVC)/y = AFC +AVC ATC falls sharply at the beginning of the production process because
explain two theories of economic rent
1. Seller has ample time to adjust to price change. 2. Buyer's response to small price change is significant. 3. Buyers are faced with many options when deciding to make a
Mathematical Presentation of Utility maximisation: Consumer's objective is to maximise her utility by solving UMP. To solve UMP, we set the Lagrange function of the correspond
What is Cost Push Inflation Cost Push Inflation : When a cost of production (e.g. wages) enhances and firms put up prices to maintain profits. Cost increases may occur beca
The Bushman Cinema is the only movie theatre located in the medium-size country town of Sleepy Hollow. The owner wants to charge an admission fee of $10 per seat and past experien
Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the commod
Inflation And Unemployment: Inflation describes a persistent and an appreciable increase in the general price level. The inflation rate is measured as a percentage change in a
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