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national income the national income or product or expenditure provides a measure of total value at factor cost of final goods and services which are
monopolistic competition and oligopolyit was recognized that most industries exhibit the features of monopolistic competition in real-life however it
pure monopolypure monopoly examined the market structure that is generally regarded as the polar opposite of perfect competition ndash ie the
perfect competitionthe behaviours of firms in perfect competition it should be noted that firms that fit into perfect competition model are very rare
economic profit and economic losseconomic profit is the excess if total revenue over total cost when the latter includes both explicit and implicit
normal profitnormal profit is when total revenue is exactly equal to total cost when the latter includes both explicit costs it is the type of profit
difference between accounting profit and economic profitthe difference between accounting profit and economic profit is that economists include in
economies of common servicesthrough the concentration of firms in a particular industry in a given geographical location the firms may enjoy
sources of external economies of scaleeconomies of skilled labour this involves upgrading the skills of labour through the provision of education and
managerial economies these are many managerial economies associated with large-scale production a large firm is in the position to employ more highly
financial economies these are benefits obtained by large firms as a result of contracting credit from financial institutions at lower interest rates
marketing economies these are derived from the bulk purchasing of inputs and bulk distribution of outputs a large firm is able to buy its raw
technical economies they are economies that accrue from the use of large machines with emphasis on full utilization and efficiency in production
internal and external economies of scaleinternal economies of scale are the advantages or benefits that the firm enjoys as it expands its size or
marginal revenuemarginal revenue is the change in total revenue with respect to a change in quantity sold that is it is the change in total revenue
explicit costexplicit costs are payments made by the firm when it purchases or hires factors of production for the production of goods and services
social costsocial cost of production refers to the cost incurred by a society when its economic resources are used to produce a given commodity the
revenue and profit maximizationwhenever a good is produced the individual firm which has produced incurs costs which are are referred to as private
disadvantages of division of labourdivision of labour may also have disadvantages that may include the followingi lack of craftsmanshipdivision of
advantages of division of labourdivision of labour has advantages including the followingdevelopment of greater skill by the worker in division of
division of labourdivision of labour involves dividing a production process into a number of smaller tasks for each task to be undertaken by a
location of industry and localization of industrylocation of industry tries to answer the key economic question where to produce it involves deciding
increasing returns to scale and decreasing returns to scaleincreasing returns to scale occur when increases in all inputs by a certain percentage
short run production period and long run production periodthe short run is a period of production during which some factors of production are fixed
fixed input and variable inputa fixed input is that input whose quantity cannot be varied in the short-run when demand conditions require an increase