December 2022

Prices of goods, as has been stated already, express the exchange value. These are also used for expressing the value of various services rendered by different factors of production such as land, labour, capital and organisation. The values are: rent, wages, interest and profit. Therefore, the concept of price especially the process of price determination, […]

Consider the following situation: You go to the local market to buy a shirt. You enter one shop which sells shirt. The shirt which you like are priced at Rs. 400. But you think that are not worth more than Rs. 300. You offer Rs. 300 for the shirt. But the shopkeeper is not ready

It is not enough for a firm to divide the costs into fixed and variable costs. It has to work out in detail the different expenses incurred on various heads.Prime costPrime cost refers to all such expenses which can be directly assigned to the production of a commodity. It generally varies directly or proportionataly with

Production analysis or the theory of production deals with the general relationship of output of goods or services with factor inputs. Normally, a physical output is related to analysis. Likewise revenue productivity which is related with economic environment and the general equilibrium of demand and supply is left out in a pure production analysis physical

Production is a very important economic activity. The standard of living of people in the ultimate analysis, demands on the volume and variety of production. In fact, the performance of an economy is judged by a level of its production. Those countries which produce goods in large quantities are rich and those which produce little

We may define capital as that part of wealth of an individual or community which is used for further production of wealth. In fact, capital is a stock concept which yields a periodical income which is a flow concept. It is necessary to understand the difference between capital and wealth. Whereas wealth refers to all

The concept ‘demand’ refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a period of time. It is to be noted that demand in economics is something more than desire to purchase though desire is one element of it. A beggar, for instance,

As the term ‘demand’ refers to the quantity of a good or service that the consumers are willing and able to purchase at various prices during a period of time, the term ‘supply’ refers the amount of a good or service that the producers are willing and able to offer to the market at various

Forecasting of demand is the art of predicting demand for a product or a service at some future date on the basis of certain present and past behaviour patterns of some related events. Please remember that forecasting is no simple guessing but it refers to estimating scientifically and objectively on the basis of certain facts

All scientific theories are based on certain assumptions and economic theories are no exception. Economics deals with human behaviour which is relatively more uncertain and unpredictable which makes economic theories all the more dependent on several assumptions.The most important and the basic of all these is the assumption of rationality. A man is a rational

The term ‘Economics’ is derived from two Greek words, oikou and nomos, meaning the rule or law of the household. It originally dealt with the way in which a prudent household might best make the most efficient use of the limited income.The concept of efficient use of resources of the family was later carried over