Advertising
What is Advertising? Definition of Advertising: - Advertising is an effective marketing tool used to promote and sell or services. Advertising is a means of communication with the users of a…
Market Demand: Determinants of Market Demand, The Market Demand Equation
What is Market Demand? Meaning of Market Demand: - Market Demand refers to the aggregate of all individual demand for the commodity demanded by all the potential consumers in the market…
Opportunity Cost and Other Concepts of Costs
An important part of being a rational decision maker is considering opportunity costs. Opportunity cost is the forgone benefit that would have been derived by an option not chosen. In…
Profit Maximization
What is Profit Maximization? Meaning of Profit Maximization: - Profit maximization is the ability of a business or company to earn maximum profit with low cost which is considered as…
Marginal Revenue and Price Elasticity
The concept of marginal revenue is closely related to the price elasticity of demand. The word 'margin' always refers to something extra. Therefore, marginal revenue is achieved by selling an…
Oligopoly: Price Rigidity and Price Leadership
Origin of Oligopoly The word oligopoly is derived from two Greek words – 'Oligi' meaning 'few' and 'Polein' meaning 'selling'. When there is limited market, in which a market is…
The Cost of Long-Term Assets
What are long-term assets? Meaning of Long-term assets: - Long-term assets are also known as non-current assets or long-lived assets, that are expected to provide economic benefits over a future…
Price Elasticity of Demand
What is price elasticity of demand? Meaning of Price Elasticity of Demand: - The price elasticity of demand is a measure of how a product's usage changes in response to…
Individual Demand
What is Individual Demand? Meaning of Individual Demand: - Individual demand refers to a person's desire for a product or service (or a household). Individual demand is the result of…
The Production Function
What is Production Function? Meaning of Production Function: - Production function is the equation that expresses the relationship between the quantities of productive factors (such as labour and capital) used…
Economics and Decision Making
What do you mean by decision making? Meaning of Decision making: - Decision making is the main objective of Managerial Economics. Decision making may be defined as the process of selecting the suitable action from among…
Principal-Agent Problem
What is principal-agent problem? Meaning of principal-agent problem: - The principal-agent problem is a conflict in priorities between an individual or group and the representative authorized to represent them and act…
Profit in a Market System
What is profit in a market system? Meaning of profit in a market system: - When a firm's revenue is greater than its costs, that firm earns a profit in…
The Concept of Economic Profit
What is economic profit? Meaning of Economic Profit: - An economic profit is the difference between the income a business firm receives from its outputs and the costs of its…
Nature of the firm
What is nature of the firm? Meaning of Nature of the Firm: - A firm is an association of individuals who have organized themselves for the purpose of turning inputs into output.…
The Circular flow of Economic Activity
What is the circular flow of economic activity? Meaning of the circular flow of economc activity: - The circular flow of economic activity is an economic model that shows the…