A curve showing different combinations of two commodities giving the same level of satisfaction to the consumer is called the indifference curve.
The Law of Diminishing Marginal Utility is based on the assumption that as a consumer consumes more and more units of a commodity, its severity of want declines, due to this, the marginal utility derived from the commodity also declines.
ility analysis, a subset of consumer demand theory, provides insight into an understanding of market demand and forms a cornerstone of modern microeconomics.
What is National Income? A national income estimate measures the volume of commodities and services turned out during a given period counted without duplication. In other words, Is defined as…
The theory of distribution or the theory of factor pricing deals with the determination of the share prices of four factors of production, viz., land, labour, capital and organization.
What is Business Economics? Business Economics, also called Managerial Economics, is the application of economic theory and methodology to business. Business involves decision-making. Decision-making means the process of selecting one…
What is Welfare Economics? Welfare economics is the study of how the allocation of resources and goods affects social welfare. This relates directly to the study of economic efficiency and…
What is Profit Function? The profit function represents the maximum profit a firm may earn for various combinations of inputs and output prices. Before deriving such a function, you must…
Monopolistic competition is a market structure that lies between the extreme cases of competition and monopoly. Competition and monopoly lie at opposite ends of the market spectrum. Perfect competition and monopoly are rarely found in the real world and thus they do not represent the actual market situation.
What is Perfect Competition? Perfect competition is an uncommon phenomenon in the real business world. However, the actual market that approximates the conditions of perfectly competitive models includes share markets,…
