Law of Returns to Scale- A Complete Guide

Law of returns to scale is one of the most important metrics to consider while running a factory. In order to understand how the change in input makes changes to the output. The Law of returns to scale discusses the change and rate of change in output due to the rate of change in the … Read more

Cardinal Utility

Cardinal Utility

Definition: Cardinal Utility approach was given by neo-classical economists, who said that satisfaction gained after using a certain commodity can be termed as Utility. Also, they assumed that cardinal utility can be measured in quantitative terms (or money), like 1,2,3,4 and so on. Meaning of Cardinal Utility:  Consumers can express their satisfaction after consuming goods … Read more

Oligopoly Market

oligopoly market

Oligopoly Market Meaning Oligopoly market structure involves only a few competitors in the market and referred to as imperfect competition. In this form of market, products are homogeneous or differentiated and the number of sellers in the market are between two and ten. For instance, the cold drink industry in India selling homogeneous as well … Read more

Circular Flow Of Income And Expenditure

Circular Flow Of Income And Expenditure

Circular Flow Of Income And Expenditure: It is a model which explains the flow of income and expenditure in the circular flow that illustrates the different sectors in an economy and reveals the different sources of their incomes and the different expenditures which they have to bear. This model is used in calculating national income, … Read more

Monopoly Meaning In Economics

Monopoly Meaning In Economics

Monopoly Meaning In Economics: A monopoly market is where there is only a single seller in the market with no presence of substitutes.  There are many reasons for which the firm gains monopoly power, such as: Government license ownership of resources copyright patent high starting cost These factors also become a restriction for new firms … Read more

Baumol’s Sales Maximisation Model – Revenue & Profit Maximisation

Baumol’s Sales Maximisation Model

Objective Baumol’s sales maximisation model has two important subheads revenue maximisation profit maximisation theory which together explains the idea behind maximising the sales. Therefore we will take a quick overview of the two concepts first which are as follows: Revenue maximisation Revenue maximisation refers to the maximising of sales in a business using various techniques … Read more

MRTS In Economics-Marginal Rate of Technical Substitution| MPL, MRS

Diminishing MRTS In Economics

Overview MRTS in economics refers to the Marginal Rate of Technical Substitution which is termed as the slope of isoquant.  Isoquants are defined almost the same as the indifference curve with few changes. As a result, we will take a quick look at isoquants before studying MRTS in economics in detail.  Isoquants An isoquant is a level … Read more