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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
(a) Define and explain, using diagrams, consumers' surplus; producers' surplus and total surplus that a society can derive from production and consumption of a good at a particu
Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase. However, for those engaged in the production of goods wi
What is the theory of the firm A firm can be considered an amalgamation of people, financial and physical resources and a variety of information. Firms exist as they perform us
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
Effects of Fluctuations in Exchange Rates When a country's currency depreciates, exporting firms may have competitive advantage but businesses which rely on imports for raw ma
CHARACTERISTICS OF MANAGERIAL ECONOMICS 1. Uses theory of firm: Managerial economics uses economic principles and conceptsthat are known as theory of Firm or 'Economics of the
KEYNESIAN VIEW ON UNEMPLOYMENT Keynes in his General Theory presented a view that fluctuations in aggregate demand (AD) influences the equilibrium level of output. Thus
THE GOVERNED ECONOMY The governed economy contains central authorities often simply called "the government" - who levy taxes on firms and households and which engages in numer
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