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Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
Equilibrium in a single market model A single market model has three variables: the quantity demanded of the commodity (Q d ), the quantity supplied of the commodity (Q s ) an
1. A sporting goods company has hired a management consulting firm to analyze demand in 20 regional markets for one of its major products: a treadmill. The consultant uses data to
limitations of managerial ecomomics
ECONOMIC EFFECTS OF TAXATION a. A deterrent to work Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to production
Q. Relation between average cost and marginal cost? Relationship between MC and AC are the following: If MC is below AC then AC should be falling. This is because, if MC
Reasons for Shift in Demand Curve Shifts in a price-demand curve may occur due to the change in one or more of other determinants of demand. Consider, for illustration, decreas
what is segmentation
Functions of the Budget The budget fulfils three main functions: To raise revenue to meet government expenditure The government of a country provides certain se
demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)
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