Imperfect Competition
Imperfectly competitive markets may be classified as: Ø Monopoly, Ø Monopolistic Competition, Ø Oligopoly and Ø Duopoly Monopoly Monopoly refers to the market situation where there is one seller and there is no close…
Market
• In economics, market means a social system through which the sellers and purchasers of a commodity or a service (or a group of commodities and services) can interact with each…
Short-run Costs
In the short-run, a firm employs two types of factors: fixed factors and variable factors. Costs are also of two types: fixed costs and variable costs. Fixed Costs - Fixed costs…
Applications of Opportunity Cost
The concept of opportunity cost has been widely used by modern economists in various fields. The main applications of the concept of opportunity cost are as follows – Determination of…
Opportunity Cost
• The concept of opportunity cost occupies a very important place in modern economic analysis. • Factors of production are scarce in relation to wants. • When a factor is…
Determinants of Elasticity of Supply
Nature of the commodity: The supply of durable goods can be increased or decreased effectively in response to change in price and hence durable goods are relatively elastic. On the…
Factor Determining Supply or Supply Function
Price of the commodity: When the price of a commodity in the market rises, seller increases the price. The cost of production remaining constant the higher will be the profit margin.…
Elasticity of Demand
Whenever a policy maker wishes to examine the sensitivity of change in quantity demanded due to the change in price, income or price of the related goods, he wishes to…
Exceptions to the law of demand
Conspicuous goods: These are certain goods which are purchases to project the status and prestige of the consumer. For e.g. expensive cars, diamond jewellery, etc. such goods will be purchased more…
Determinants of demand
There are many factors other than price that can affect the level of quantity demanded. This defines demand function. (i) Price of the Commodity : There is an inverse relationship…
