In economics, demand is described as “desire backed by adequate purchasing power”. It is defined as the amount of a commodity which a consumer is…
Income Effect
A consumer’s buying behavior is shaped by many parameters like his tastes and preferences, income levels, the price level in the economy, prices of substitutes…
Balance Of Payments – Meaning, Types and Importance
Balance of payments is the statement maintained by countries, which enlists all the monetary transactions made in a fixed period between the country and the…
The Law of Diminishing Marginal Utility Explained
Law of Diminishing Marginal Utility comes under the purview of Macroeconomics, a branch of economics that deals with the economic behavior of individual variables such…
Abnormal profit explained
Everyone is after money and want to increase their bank balance. Multiple companies are running every second of twenty-four hours at the national and international…
The Market Demand Curve
The market demand is always varying due to various factors. One factor can be production and product availability. Another factor can be the price of…
Cyclical Unemployment – Definition, Causes, and Solution
Definition The loss of jobs by workers as a result of downturns occurring in the business cycle is known as cyclical unemployment. Alternatively, you define…
Consumer Surplus – Explanation and Its Formula
Consumer surplus comes about when there is a difference between the value of the commodity to be purchased and its value. Consumer surplus can, therefore,…
Bounded Rationality in organization decision making
Corporate management is a responsibility that comes with a lot of challenges. Managers are often required to attend to issues and difficulties that need resolutions,…
Adverse Selection
If I have to explain Adverse selection, i will take the simple example of College life. Many times in college life, our parents might say,…
Complexity theory of businesses – What is complexity theory?
Complexity theory was proposed by researchers who tried to rationalize and explain the behavior of large and complex systems, as it was believed that they…
Different Types of Demand
Demand forecasting is an essential activity in sales and marketing. The demand forecasting has to be done so that the company does not store huge…
Accelerator principle
The accelerator principle is also known as accelerator effect or acceleration principle. It can be described as an economic concept that defines the association between…
Absolute cost advantage
As a firm, there are a lot of things that need to be done to ensure that you maintain a competitive advantage in the market….
Economies of Scale
Economies of scale is a concept which leads to reduction of costs when a company expands its production. The cost is reduced because fixed costs…
