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Q. Show Normal profit equilibrium? Normal Profits: With the condition of MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM
types of elasticity
Elastic Supply Supply is said to be price elastic if changes in price bring about changes in quantity supplied in greater proportion. Thus, when price increases, quantity sup
Monetary Theory We have seen that Schumpeter theory which runs in terms of innovations and technical change, is at best an incomplete explanation of trade cycle . there are eco
Advertising expenditure must remain the same If advertising expenditure of a firm increases, consumers may be tempted to buy more of its product. Hence the advertising expendit
Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function: AC=MC=10 and a potential entrant has a cost function: AC=MC=20
Question: (a) The regression results for the quantity demanded of good X is given by ln Q X = 1220 - 9.5 ln P X - 2.21 ln P Y + 1.01 ln M t values (5.3) (-5.1
Explain baumol''s static model
Q. What do you mean by Market Structure? Market economy pricing is conditioned by market structure. There are various forms of market structures. Perfect competition is accorde
INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers. They can also be de
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