The important property of monopolistic competition is this that no of firm is more than monopoly but less than perfect completion. Normally the number of firm ranges between 14 to 80. Every monopolist has differentiated in his product. Such differentiation may be real as well as imaginary. The real differentiation may be due to difference … Read more

Whether a firm is operating under PC or under MONOPOLY the objective or the goal of the firm is to maximize the profits.This suggests rationality on the part of the producer of both the market. In both the models the owner of the firm is also the manager entrepreneur there is no separation of ownership … Read more

Under such PD we present the following propositions monopolist has two markets to sell his output. Accordingly the demand curve of monopolist is the horizontal summation of demand curve face in two different markets with we called DM. corresponding to such demand curve there will be summed marginal revenue which we give the name MR. … Read more

The economic feasibility of price discrimination requires the fulfillment of following conditions.The price discrimination is possible in the presence of monopoly or like wise situation. Any firm working under comparative condition cannot differentiate between. S in the case of wapda has monopoly in the production and sale in the electricity is in position to charge … Read more

The monopoly rises when a firm has a control over the specific raw material like, oil, gas, bronze, copper, gold and bauxite etc. The monopoly may rise when a firm possesses a certain technique of production or production rights of some particular product. As the case of some firm producing life saving drugs or some … Read more

As we the behavior of a firm working under competitive condition both in short run and in long run. But in real life the model of perfect competition is hardly available accordingly at the other extreme we have a market model of monopoly. The model where a single firm dominates the whole market. No doubt … Read more

The long run supply curve is a curve which shows how many units of commodity the existing and expected firms in the industry are prepared. To sell at different prices when they can change their fixed as well as variables factors of production While discussing the long run equilibrium of the firm we assume that … Read more

Lump sum tax: The lump sum tax is just like fixed costs. Accordingly in short run when fixed tax is imposed it will not affect marginal cost. Hence in short run neither price nor price will be effective. However both in short run and long run if the firms are earning normal profits because of … Read more

It is a market structure where the uniform price is a charged for all the units of a good. Such market has following salient features: In the perfectly competitive market all the units of good are homogeneous and identical. In other words in such market the units of a good sold do not have any … Read more

The engineering cost curve is derived with the help of engineering production function. The production function specified the techniques of production, the embodiment of labor and capital etc. it means that in each technique of production such activates operates which are concerned with the physical and technical situation of nay product. In physical and technical … Read more

Long run modern cost concepts are classified into production costs and administrative costs. All such costs are variable in long run. As a result the long run modern costs curves are L shaped. Hence costs go on falling along with increase in output. The administrative cost may increase at a higher level of output. But … Read more

So many economists like Stigler has objected the you shaped of traditional cost curves. According to the classical economists each plant ensured short run can produce only a specific level of output. If more than this output is produced the cost of production will rise. On the other hand modern economists are of the opinion … Read more

As we know that law of variable of proportion such law is concerned with short run Q = f (L) while capital is kept constant this law is based upon three laws of production, increasing returns, constant returns, and decreasing returns. But we have long run situation also where both labor and capital are variable, … Read more

It must be remembered that optimum factor combination factors represents such a combination of labor and capital where either, the production of the firm be maximized or the cost of the firm be minimized. In this respect we will discuss the following concept of Isoquant and MRTS. Isocost line, equilibrium of the firm. It is … Read more

The purpose of each ration rational producer is to maximize its output or minimize its costs of production. Therefore, the firm which is to produce with the help of labor will not employ those units of labor having negative MP. Accordingly stage three will be an uneconomic stage for the producer. Therefore the producer will … Read more

The classical P.F. is concerned with the short run and this production function states that production depends upon unit of labor only while capital etc. is kept constant it is as: Q = f (L) K.Classical are of the view that keeping the other factors constant if we go on employing the units of labor. … Read more

Basically we find the traces of theory of production in the writing of Vonthunen in 1826 who presented this principle that if the factors of production are allocated on the basis of marginal productivity then the total output will be maximized. Then in 1894 Wickstead in production theory gave the idea that the factors of … Read more

Oskar Morgensdern in his article demand theory reconsidered has discussed the indivisibly and desire of conspicuous and different consumption style. He says that such possibilities have contracted the traditional demand curve the same like situation has been presented by Harvey Levin stein in his article Bandwagon snob and Veblen effects in the theory of consumer … Read more

The demand curve is closed that there is a negative relationship between price and quantity, except Geffen paradox. Such relationship in economics is known as law of demand or demand function. Accordingly the law of demand is stated as other things remaining the same when the price of any commodity prices its demand contract while … Read more

Both the classical and neo-classical approaches assume that a consumer is rational. He is well aware of with his income and the prices of the goods prevailing in the market and in such state of affairs the consumer wants to maximize his satisfaction. The Marshallian cardinal theory is based upon the reality of diminishing marginal … Read more