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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.
The institutional intervention theories Collective bargaining provides an example of what is sometimes called bi- lateral monopoly; the trade union being the monopolist suppli
Q. Explain Price elasticity and total revenue? Given the relationship between price elasticity and marginal revenue of demand in Eq. II, the decision-makers can simply know whe
what is the relation between leverage and elasticity?
What do you mean by the fiscal policy? What are the instruments of fiscal policy? Briefly comment on India's fiscal policy.
A baseball team is trying to predict ticket sales for the upcoming season. They are also considering increasing prices. The market has a population of 2 million persons. The team s
It is presumed that every of the different combinations of capital and labour displayed in Table produces the same level of output, which is, 20 units. Combinations are such that i
Another vital relationship that is often referred to in economic analysis is the relationship between consumption expenditure andprice elasticity. From the law of demand, we know t
a critique of the relevance of managerial economics
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Gains From International Trade The gains from International trade are to make the participating countries better of than they would have otherwise been. This will be the res
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