Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
factor combination in the long runin the long run it is possible to vary all factors of production the firm is therefore restricted in its activities
relevance of the law of diminishing returnsthe law of diminishing returns is important in that it is seen to operate in practical situations where
where does the firm operatethe firm will avoid stages i ii and iii and will instead choose stage ii it will avoid stage i because this shall
characteristics of the three stages stage ihere the total physical product average physical product and marginal physical product are all
the law of diminishing returns law of variable proportionsone of the most important and fundamental principles involved in economics called the
equilibrium in a two commodity marketlet us consider a two-commodity market model in which the two commodities are related to each other let us
buffer stocks and stabilization fundsin this case the government buys up part of the supply when output is excessive stores this surplus and resells
perfectly elastic supplysupply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand the demand curve has
elastic supplysupply is said to be price elastic if changes in price bring about changes in quantity supplied in greater proportion thus when
unit elasticity of supplysupply is said to be of unit elasticity if changes in price bring about changes in quantity supplied in the same
inelastic supplysupply is said to be price inelastic if changes in price bring about changes in quantity supplied in less proportion thus when
perfectly inelastic zero elastic supplysupply is said to be perfectly inelastic if the quantity supplied is constant at all prices the supply
importance of cross elasticityknowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to
cross elasticitycross elasticity of demand measures the degree of responsiveness of the quantity demanded of one good b to changes in the price of
importance of income elasticityif a country is experiencing economic growth the income of the people will increase however for those engaged in
types of income elasticity of demanddepending upon the product demand might increase or decrease in response to a rise in income there are thus
income elasticity of demandthe income elasticity of demand measures the degree of responsiveness of the quantity demanded of a product to changes in
practical importance of the knowledge of price elasticity of demandthe practical importance of the measures of elasticity of demand is to be
factors determining elasticity of demand ease of substitution nature of the commodity ie whether it is a necessity of life luxury or addictive
types of price elasticity of demand a perfectly inelastic demanddemand is said to be perfectly inelastic if changes in price have no
price elasticity of demandis the responsiveness of the quantity demanded to changes in price its co-efficient isped proportionate change
definition of elasticityis defined as the ratio of the relative change of one dependent variable to changes in another independent variable or its a
stable and unstable equilibriuman equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it in other
factors influencing supply curvestate of technology there is a direct relationship between supply and technology improved technology
goals of the firmhow much is produced by a firm depends on its objectives a firm which aims to maximise its sales revenue for example will