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Q. Explain about Inventory Economies?
Inventory Economies:Role of inventories is to aid the firm in meeting random changes in the output and the input sides of the operations of the firm. Purpose of inventories is to smooth out the supply of outputs and the supply ofinputs.
Inventories on spare parts, raw materials and finished products increase with the scale of production though they don't increase proportionately with the increase in size of output. Hence as the size of output amplifies the firm can hold smaller percentage of inventories to meet random changes.
Write on one theory of profit. Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is t
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d/f b/w MRTS and MRS
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