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SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses. The monopolist controls his output or price, but not both. The monopoly maxi
Demand for money The demand for money is a more difficult concept than the demand for goods and services. It refers to the desire to hold one's assets as money rather tha
When is production profitable according to price-taking firm at profit, break-even or loss? Production profitable at profit, break-even or loss: a. When TR > TC, in that cas
The Current Account This records all transactions involving the exchange of currently produced goods and services and is subdivided into i. Visibles: A record
Explain the importance of managerial economics.
Marginal utility approach The downward sloping nature of the demand curve can be explained by using the law of diminishing marginal utility . For instance, consider a consum
Equilibrium in a two commodity market Let us consider a two-commodity market model in which the two commodities are related to each other. Let us assume the functions for bot
points and its explanation
Difficulties in using fiscal policy There are several problems involved in implementing fiscal policy. They include: Theoretical problems Monetarists and the Keynesia
Merits of direct taxes a. They satisfy the principle of equity as they are easily matched to the tax payers capacity to pay once assessed. b. They satisfy the principles
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