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Williamson, Wachter and Harris (1975) suggest promotion incentives within the firm as a substitute to morale-damaging monitoring, where promotion is based on objectively measurable performance. (Difference between these two approaches may be that former is applicable to a blue-collar environment whereasthe latter to a white-collar one).
To eliminate competition and thereby secure higher prices, firms producing a specific product can come together and make monopoly agreements. These are called as industrial combina
Theory of consumer behavior
Average Propensity to save The Average Propensity to Save [APS] is defined as the fraction of aggregate national income which is devoted to savings. Thus if S denotes savin
Q. Loss at the point of equilibrium? Losses: At the point of equilibrium i.e. E where MR = MC, firm produces OM amount of the output. To produce this output, firm incurs an a
Q. Explain about isocost line? In economics, an isocost line signifies all combinations of inputs that cost the same total amount. Though, similar to the budget constraint in c
Suppose a firm's budget were large enough to employ 100 units of either labor or capital, the cost of a unit of labor being the same as a unit of capital. The production function i
A toy manufacturer makes output according to the production function: where n is the number of workers employed by the firm, O is a technological parameter and g the worker
Explain important terms of marginal productivity and wage inequality Marginal Productivity and Wage Inequality: a. Market power • Compensating Differentials • Dang
A profit-maximizing firm faces the following options for hiring workers: a) Assume the firm has limited space so that it can only hire one worker. Which type of employee sh
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