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1. What is the difference between a static (master) budget and a flexible budget?
Ans: static budget is where a budget doesn't change a volume changes. An example could be that if the budget started out at $300,000, yet sales were $500,000, the budget would remain at $300,000. A flexible budget would adjust for changes in activity and volume either via an increase or decrease in price.
We can analyse the equilibrium of a firm under Perfect Competition in both the long run as well as in the short-run. SHORT RUN EQUILIBRIUM OF A FIRM UNDER PERFECT COMPETITION
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