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Fixed costs are those that are independent of output. They should be paid even if firm produces no output. They wouldn't change even if output changes. They remain fixed whether output is small orlarge. Fixed costs are also known as 'overhead costs', 'sunk costs' or 'supplementary costs'. They include payments likeinterest, rent, depreciation charges, insurance, maintenance costs, administrative expenselike manager's salary, property taxes and so on. In the short period, total amount of these fixed costs won't decrease or increase when the volume of firms output falls orrises.
EFFICIENCY-WAGE THEORIES OF UNEMPLOYMENT Efficiency wage theories are clearly non-Walrasian theories in as much as they postulate payment of wages that are higher than m
Menu Costs Why do firms not change their prices very frequently? Obviously, the costs of changing prices at frequent intervals and in small amounts must be more than the b
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Foreign Exchange Markets It is the place where buyers and sellers meet to negotiate the exchange of different currencies e.g. forex bureaus. Exchange Rates These are
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Let Consider an economy with three states. The following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4). The t=0 prices of these stocks are give
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Concept of Managerial Economics The discipline of managerial economics deals with characteristics of economics and tools of analysis that are used by business enterprises for dec
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