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Equilibrium in a two commodity market Let us consider a two-commodity market model in which the two commodities are related to each other. Let us assume the functions for bot
Laws of returns to scale alludes to the long-run analysis of the laws of production. In the long run, output can be increased by varying all factors. So in this section we study th
REGRESSIVE TAX A tax is said to be regressive when its burden falls more heavily on the poor than on the rich. No civilized government imposes a tax like this.
Q. What is Right Angled Isoquant? This presumes zero substitutability of factors of production. There is just one method of producing any one commodity. In this case, isoquant
incrimental principle
Importance of Cross Elasticity Knowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to protect a domestic industry.
Q. Production Planning in demand forecast period ? Long term production planning can assist the management in organising long term finances on practical terms and conditions. S
Supply-side policies Supply-side policies are intended to increase the economy's potential rate of output by increasing the supply of factor inputs, such as labour inputs and
Point and arc elasticity of demand The elasticity of demand is conventionally measured either at a finite point or between any two finite points, on demand curve. The elasticit
Short-Term Policies Deflation is a policy of reducing expenditure with the intention of curing a deficit by reducing the demand for imports. This reduction of expenditure m
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