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Supply of Basic Industrial Inputs:
Allowing their duty-free imports by exporters would require an elaborate machinery of customs and import licensing to ensure that the imports did not leak out into the domestic economy. Even now the machinery which allows limited export-related imports, does not function very satisfactorily. To extend it to manage large-scale imports of basic goods is not possible. Besides, there are inputs which cannot be imported. There are indirect inputs for which it would be impossible to work out any import our exporters to compete fairly with their counterparts abroad is to ensure that these basic goods are available to everyone?exporters, potential exporters and non-exporters?at international prices. There is another issue that needs resolution: rupee lending rates. Obvious comparisons crop up with foreign currency financing. However, while foreign currency loans are available at a spread over London, Inter-Bank Offered Rate (LIBOR) and US Treasury (UST) rate, the rupee funds will come only as a spread on Prime Lending Rates (PLR).
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International trade: International trade refers to the exchange of goods and services between countries. Goods sold to other countries are referred to as exports and goods bou
do you think that dimnishing returns to a factor are consistent with increasing returns to scale? explain with suitable diagram and reasoning.
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Consider the market for purple magic markers. The demand for purple magic markers is perfectly elastic and the supply is upward sloping. If sellers of purple magic markers are taxe
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price falls and demand is elstic
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Average Total Cost (ATC): ATC is the total cost per unit of output. ATC = TC/y = (TFC + TVC)/y = AFC +AVC ATC falls sharply at the beginning of the production process because
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