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Drafting of Production Policy: Demand forecasts assists in drafting appropriate production policy so that there may not be any space between future demand and supply of a product. This can in addition ensure:
• Routine Supply of Materials: Demand forecasting facilitates in figuring out the preferred volume of production. The necessary prerequisite of raw materials in future can be calculated on the basis of such forecasts. This ensures regular and continuous supply of the materials additionally to managing the amount of supply at the economic level.
• Best Possible Use of Machines: Demand forecasting in addition expedites cutting down inactive capacity since only the essential amount of machines and equipment's are set up to meet future demands.
• Regular Availability of Labour: As soon as demand forecasts are made, supplies of essential amount of skilled and unskilled workers can be organised well beforehand to meet future production plans.
Occurrence of Stagflation Two possible theoretical explanations can be given for the occurrence of stagflation almost all over the world. The first explanation follows directly
Practical Importance of the knowledge of Price Elasticity of demand The practical importance of the measures of elasticity of demand is to be appreciated in various ways:
The significance of behavioural approach is difficult to assess. It provides useful insights into some aspects of business behaviour. March and Cyert have claimed considerable shor
asumption and limitation of increemrntal,oppurtunity cost
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
Consider an economy with three assets and three states. Let be the matrix of asset payoffs at t=1 and p the vector of asset prices at t=0. Assume p 3 =2. a) Does an ar
Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.
Q. Show the Changes in fixed costs and profit maximisation? A firm maximises profit by operating where marginal revenue equals marginal costs. A change in fixed costs hasn't an
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
Q. Describe Managerial and behavioural theories? It was only in 1960s that neo-classical theory of firm was disputed by alternatives like behavioural and managerial theories. M
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