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To eliminate competition and thereby secure higher prices, firms producing a specific product can come together and make monopoly agreements. These are called as industrial combinations. When all the firms merge into one organisation, such a monopoly takes the form of a trust.The firms sustain their individual identity and yet enter into monopoly agreements such combinations are called as trade associations, cartels, pools and holding companies. A pool is deemed a loose combination to sustain a particular higher price level of a commodity. A cartel is based on agreements to restrict output to get high prices. A holding company secures monopolistic control over some firms by holding a majority of shares in them.
Monetary policy The problems concerning the ability of monetary policy to influence the economy, as for instance the doubts about the ability of lower interest rates to st
Factors influencing Exchange Rates i. Inflation: Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil
A firm with market power has estimated the following demand function for its product: Q = 12,000 – 4,000 P where P = price per unit and Q = quantity demanded per year. The firm’s t
A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs Rs 4 per hour and cement costs Rs 12 per ton. For the quantities employed MPL = 3 an
General and Selective Credit Control These are imposed with the full apparatus of the law or informally using specific instructions to banks and other institutions. For insta
Theory of consumer behaviour The role of customers in an economy is of significant importance because consumers spend most of their incomes on services and goods produced by fi
Discount Rate (Bank Rate) This is the rate on central bank advances and is also called official discount rate or "minimum lending rate". When commercial banks find themselves
REASONS FOR FLUCTUATIONS IN AGRICULTURAL PRICES Production depends on factors beyond the control of the producers e.g. weather, disease and pests. Actual and planned output i
What is Risk and Production analysis Risk analysis: Various models are used to quantify risk and asymmetric information and to employ them in decision rules to manage risk.
Q. Simon satisfying behaviour model? The behavioural approach as developed in particular by Richard Cyert and James G. March of the Carnegie School, lays emphasis on explaining
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