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The least square method is based on the assumption that the past rate of change of the variable under study will continue in the future. It is a mathematical procedure for fitting a line to a set of observed data points in such a manner that the sum of the squared differences between the calculated and observed value is minimized. This techniques is used to find a trend line which best it the available data. This trend is then used to project dependant variable in the future. This method is very popular because it is simple and in expensive.
Price elasticity of supply – Computes the percentage change in quantity supplied resulting from a 1 percent variation in price. – The elasticity is usually positive as price
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If producers expect future prices to enhance, current supply will decline in favor of selling inventories at higher prices later. In other words, supply will reduce (a shift to th
The Market Mechanism Features of the equilibrium or market clearing price: – QD = QS – No shortage or scarcity – No extra supply price. – No pressure on th
a) The production function of certain firm is given as Q = 40 K 1/2 L 3/4 A unit of capital and labour costs Kshs 44 and Kshs 36 respectively. The firm would like to maxim
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What is use of analytical tools in the modern economics? Analytical Tools: Modern economics also gives different powerful analytical tools which are usually specified by geo
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