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Drafting of Production Policy: Demand forecasts assists in drafting appropriate production policy so that there may not be any space between future demand and supply of a product.
Suppose that the government is the only provider of water. The market demand function reads D: Q(P) = 50 - 2P. The government''s total cost for producing water are described as fol
Using Total Expenditure for Calculating National Income The expenditure approach centres on the components of final demand which generate production. It thus measures GDP
Menu Costs Why do firms not change their prices very frequently? Obviously, the costs of changing prices at frequent intervals and in small amounts must be more than the b
Inelastic Supply Supply is said to be price inelastic if changes in price bring about changes in quantity supplied in less proportion. Thus, when price increases quantity sup
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what is profit appropriation
monopolistic competition
Disadvantages of product differentiation a) Product differentiation generally reduces the degree of competition in the market. It does this in two ways: i.
How Income level must remain constant - law of demand The law of demand operates only when income level of the buyer remains constant. If income rises when the price of commod
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