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Frank H. Knight treated profit as a residual return to uncertainly profit. Obviously knight made a distinction between risk and uncertainly he divided risk into calculable and non-calculable risks. Calculable risks are those whose probability of occurrence can be statistically estimated on the basis of the available data. For example risk due to the fire, theft accidents etc, are calculable and such risks are insurable. There remains however an area of the risk in which the probability of the risk occurrences cannot be calculated. For instance, there may be a certain element of cost which may not be accurately calculable and the strategies of the competitors may not be precisely assessable. The risk elements of such incalculable events are not insurable. The area of the incalculable risk is the area of the uncertainty. It is in the area of uncertainty that business decision making becomes a crucial function of an entrepreneur. If his decisions are proved right by the subsequent events, the entrepreneur makes profit and vice versa. Thus according to the knight profit arises from the decision taken and implemented under the condition of the uncertainty. In his view the profit may arise as a result of decisions concerning k the state of market, decisions which result in the increasing the degree of the monopoly decisions with respect to holding stocks that holding stocks that give rise to windfall gains, and decision taken to introduce new techniques or innovations.
TC=100+0.15Q, Qu=1000-10Pu
BU 5210 Final Summer 2013 Economic Analysis
what is deadweight loss calculation?
Explain the demand for a commodity The functional relationship between demand for a commodity and its various determinants may be expressed mathematically in terms of a demand
Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B
marris'' model of managerial enterprise?
scope of marginal costing
demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)
The Circular Flow of Income and Expenditure This is an economic model illustrating the flow of payments and receipts between domestic firms and domestic households. The househo
Suppose that Betsy's utility function is given by the equation U=Y0.3 where Y is calculated in thousands of dollars. Betsy's present job pays her $20,000 (Y=20) per year and she ca
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