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The Consumption Function
The consumption function is the relationship [expressed in mathematical or diagrammatic form] between planned consumption and other independent variables, particularly income.
The consumption function is one of the most important relations in Macro-economics. Consumption is the largest single component of aggregate expenditure and if we are to predict the effects of income and employment of variations in private investment and in government spending, we must know how consumption varies in response to changes in income. Thus it is important to take a closer look at the consumption.
State about Production theory Production theory assists in determining the size of firm and level of production. It clarifies the relationship between marginal and average cost
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Consumer Demand is how much of something that consumers are wanting. A company requires to know the consumer demand so they know how much of a product to build.
A monopolist has two types of customers. There are 100 of Type A, who will every pay up to $10 for a single unit of the good, and 50 of Type B, who will every pay up to $8. Neithe
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Buffer stocks and stabilization funds In this case the government buys up part of the supply when output is excessive, stores this surplus, and resells it to consumers in time
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