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Problem 1: a) Explain what is meant by ‘price discrimination' and what are the different types of price discrimination. b) Under what conditions is it possible and profitabl
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
Equilibrium National Income in a Frugal Economy Saving and investment are examples of two categories of expenditure called withdrawals and injections. A WITHDRAWAL is any inc
Q. Define the Natural Monopoly? Natural Monopoly: Natural monopoly is because of natural factors. For illustration, a particular raw material is concentrated at a specific pl
Disguised unemployment Situation where some people are employed apparently, but if they are withdrawn form this job, total production remains the same. In most developing coun
The production function can have many uses. It can be used to compute least-cost factor combination for a given output or maximum output combination for a given cost. Knowledge of
LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry. For example, when surplus profits exist, there will be new entrants bec
b) Discuss the validity in Zimbabwe of the grounds on which the profit maximising model of the firm has been defended.
Q. Explain the Game theory? Game theory: Game theory is a branch of applied mathematics which is used in the social sciences, most particularly in economics, as well as in b
NOMINAL RIGIDITIES VERSUS REAL RIGIDITIES Nominal rigidities are said to exist when nominal prices and wages do not change in the face of conditions that call for thei
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