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The Firm The unit that uses factors of production to produce commodities then it sells either to other firms, to household, or to central authorities. The firm is thus the uni
Suppose there are two types of T-shirts: branded ones and unbranded ones and people allocate their spending in a way that they buy both types. Suppose the price of branded T-shirts
Relevance of The Law of Diminishing Returns The law of diminishing returns is important in that it is seen to operate in practical situations where its conditions are fulfille
Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread: Purchase 1 call with exercise price a Sell 2 ca
producer equllibrium
Fixed Costs (FC) These are costs which do not vary with the level of production i.e. they are fixed at all levels of production. They are associated with fixed factors of p
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
MONOPOLISTIC PRACTICES The following practices may be said to characterize monopolies. Exclusive dealing to supply and collective boycott Producers agree to supply onl
what are the objectives of a firm
The International Monetary Fund The International Monetary Fund is a kind of an embryo World Central Bank. Its objectives are: i. To work towards the full convertibilit
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