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Download e-book for iPad: A Text Book of Business Economics by Pareek, Saroj

By Pareek, Saroj

ISBN-10: 9380207050

ISBN-13: 9789380207056

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Extra resources for A Text Book of Business Economics

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He would like to charge as high a price as possible. Marginal utility and marginal cost of production are the two limits. The price fluctuates between them. It is fixed at a point where it is equal to supply. Competition between buyers raises the price and between sellers lowers the price. Normal Price: Normal price is the price which is likely to prevail in the long run if sufficient time is allowed for adjustment between demand and supply. Normal Price is neither abnormally high nor abnormally low.

Ft Substitute for the Commodity: If a commodity have number of substitutes, the demand is relatively elastic. Such as if petrol 53 Important Terms Used in Managerial Economics prices are high then-reople leave the cars, and like to use scooters, buses or cycles. (g) Urgency of Demand: If the price of an essential commodjty rises, such as sugar, wheat or salt, one would like to give up something else than giving up the sugar or salt. If one have the habit of smoking, the demand is inelastic, because with prise rise in cigarettes, one would like to give up smoking or reduce number of the same.

Price of a commodity is affected by the demand and the supply of that product. Law of Supply: " As the price of a commodity rises, its supply increases and as the price falls, its supply declines". e. larger the supply(,higher the price or vice-versa. Other things remain same. Increase and Decrease in Supply: This means a change in quantity supplied without any change in price. This, therefore indicates a shift in supply schedules to the right with increase in supply and to the left with decrease in supply.

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A Text Book of Business Economics by Pareek, Saroj

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