DEFINITION OF INFLATION

INFLATION      DEFINITION OF INFLATION              By inflation, in ordinary language, we mean a process of raising prices. A situation is described as inflationary when either the prices or the supply of money are raising, because in practice both will rise together. In the Keynesian sense, true inflation begins when output the elasticity of supply output in response to increase in money supply has fallen to zero or when output is unresponsive to changes in...

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MERITS OF PERFECT COMPETITION

MERITS OF PERFECT COMPETITION                   i.            OPTIMUM USE OF RESOURCES: The producer can attain a least cost combination of factors of production and thus can afford to keep price of the product as low as possible. In aggregate for the nation, resources can be optimally utilized.               ii.            PRODUCTION...

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IMPERFECT COMPETITION

IMPERFECT COMPETITION               The main reason for competition to prevail in the market is to achieve an optimum price in favor of both buyer and seller. However, under imperfect competition price of a product does not become optimum as to how imperfect competition comes into existence. 1)      PRODUCT DIFFERENTIATION: Basically the products are of the same kind but more often than not in order to promote sale of the product, the producer modifies...

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KINDS OF MARKETS ACCORDING TO COMPETITION

KINDS OF MARKETS ACCORDING TO COMPETITION       (A) PERFECT COMPETITION       (B) IMPERFECT COMPETITION (A) PERFECT COMPETITION      In order for Perfect competition to prevail in the market, the following six pre-conditions have to be satisfied. 1.      Homogeneous products: This means that the products are to be perfectly identical substitutes for one another. Under price competition the consumers accept the product being produced...

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KINDS OF MARKET ACCORDING TO COMMODITIES

KINDS OF MARKET ACCORDING TO COMMODITIES This market deals with various commodities which we shall mention in the following sub-headings. 1)      GENERAL MARKET: As the name implies, this type of market deals with general commodities that are daily use, e.g. the provision stores. Here, we can purchase goods such a food items and beverages, stationary, toiletries etc. 2)      SPECIALIZED MARKET: This market only deals with specific products. Only one particular kind of product is sold,...

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DIFFERENT KINDS OF MARKET

DIFFERENT KINDS OF MARKET         Generally market can be divided into four types. These kinds of markets are according to the following: 1)      TIME 2)      SPACE 3)      COMMODITIES 4)      COMPETITION (i) EXPLANATION OF MARKET ACCORDING TO TIME: Market can be classified into three main categories according to time.         i.            Very short...

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MARKET

MARKET WHAT DO WE UNDERSTAND NY THE TERM MARKET?               Economists have defined market as an area where buyers and sellers, come in contact with each; other by any means of communication in order to determine the price of a product through the farces of demand and supply. Market area is not restricted. It can be the smallest area e.g. a village, or the largest area e.g. the international area in marketing. MEANING OF MARKET:      “Originally”, Says Jevons, “a market was a public place...

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DIFFERENCE BETWEEN SUPPLY AND STOCK

SUPPLY      Supply is the quantity of output brought for sale in the market at a certain price, e.g. supply of rice is 1000 kg and is being sold in the market at Rs. 40 per kg. DIFFERENCE BETWEEN SUPPLY AND STOCK:     Stock is the quantity of output which a seller/business has with him and has not yet been brought for sale: where supply is the quantity of output brought from the existing stock of sale...

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MONOPOLY THEORY OF PROFITS

MONOPOLY THEORY OF PROFITS                There is no doubt that profits arise from dynamic changes, innovations and from making a correct estimates of future economic conditions. Another view point of profit is that monopolistic and monopolistic competition in the market also give rise to profits, the firms under monopoly or monopolistic competition have great control over the price of the product. They are the price makers rather than the price takers. As such they raise...

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