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SHORT RUN EQUILIBRIUM OF THE FIRM A firm is in equilibrium when it is maximizing its profits, and can't make bigger profits by altering the price and output level for its prod
Q. Availability of Substitutes - Determinants of Demand? One of the most important determinants of elasticity of demand for a commodity is availability of its substitutes. Clos
Theories of wage determination Early theories about wages The earliest theories about wage determination were those put forward by Thomas Malthus, David Ricardo and Karl
Shifts in demand curve Shifts in the demand curve are brought about by the changes in factors like taste, prices of other related commodities, income etc other than the price
Q. Explain the Leibenstein model? Leibenstein (1966) sees a firm's norms or conventions, dependent on its history of management initiatives, labour relations and other factors
What limitations are inherent in the economist’s view of pricing?
PRICE ELASTICITY OF SUPPLY AND THE SLOPE OF THE SLOPE CURVE For a straight line supply curve, the gradient is constant along the whole length of the curve, but elasticity
Q. What do you mean by External Economies? External economies arise outside the firm as a result of improvement in industrial environment in that the firm operates. They are ex
A firm in a perfectly competitive market invents a new situation of production that lowers its marginal costs. What happens to its output? What happens to the price it charges?
Neo Classical vs Keynesian School We know that Keynesian economics was propounded as a revolution against the then prevailing orthodoxy of the classical school. In time,
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