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Disadvantages of product differentiation a) Product differentiation generally reduces the degree of competition in the market. It does this in two ways: i.
What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume
Peanut butter monopolist Calvé supplies peanut butter to Albert Heijn in an isolated village. The supermarket is a monopolist in the village. Demand for peanut butter is given by:
Tastes of the buyer must not alter Any alteration which takes place in the taste of consumers will in all probability thwart the working of the law of demand. It frequently hap
Disadvantages of Perfect Competition There is a great deal of duplication of production and distribution facilities amongst firms and consequent waste. Economies of sc
Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation
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
Problem: (a) (i) Assuming that a household uses a subjective discount rate of 10%, calculate the amount that she must spend on consumption per annum during her years of existe
REASONS FOR FLUCTUATIONS IN AGRICULTURAL PRICES Production depends on factors beyond the control of the producers e.g. weather, disease and pests. Actual and planned output i
Factors affecting the long run trend of the Terms of Trade for developing countries Most Third World countries have been faced by a fall in their terms of trade over the long
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