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Let Consider an economy with three states. The following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4). The t=0 prices of these stocks are give
Pricing Methods
Unit Elasticity of Supply Supply is said to be of unit elasticity if changes in price bring about changes in quantity supplied in the same proportion. Thus, when price rises,
Q. Causes for diseconomies of scale? The most significant cause for diseconomies of scale is the diminishing returns to management. As the output grows beyond certain level the
Difficulties in using fiscal policy There are several problems involved in implementing fiscal policy. They include: Theoretical problems Monetarists and the Keynesia
SHORT RUN OUTPUT AND PRICE In monopolistic competition, it's the product differentiation that permits its price without losing sales. Due to brand loyalty consumers will c
In Home and Foreign there are 2 factors of production, land & labor, used to produce only one good. The land supply in every country and the technology of production are exactly th
Prices of other related goods i) Substitutes: If X and Y are substitutes, then if the price X increases, the quantity demanded of X falls. This will lead to inc
Controller of Credit The principles of credit control by the central bank were discovered and enunciated after the publication of Bagehot Lombard street in 1873. Even after 187
how does knowledge of economics help in maximizing profit in firm
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