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Real Rigidities in the Goods Market The most important factor associated with real rigidity in the goods market is the existence of imperfect competition. Imperfect comp
Price Elasticity of Demand Is the responsiveness of the quantity demanded to changes in price; its co-efficient is Pe d = Proportionate change in quantity demanded
Long run Equilibrium of a Firm under Monopoly In the long run, firm has the time to adjust his plant size or to employ existing plant so as to maximise profit. Long run equili
diagram of a perfect competition
What is the role of scarcity in management decisions-making
ELASTICITY OF DEMAND
Relevance of The Law of Diminishing Returns The law of diminishing returns is important in that it is seen to operate in practical situations where its conditions are fulfille
Variable Reserve Requirement (Cash and Liquidity Ratios) The Central Bank controls the creation of credit by commercial banks by dictating cash and liquidity ratios. The ca
No new substitutes for the commodity If some new substitutes for a commodity appear in the market, its demand normally declines. This is quite natural, since with the availabil
State the Basis of business policies Managerial economics is the founding principle of business policies. Business policies are prepared based on studies and findings of manage
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