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Month: October 2020

Factors that a business firm should consider while developing an advertising policy

October 25, 2020November 3, 2020 MJ

A business firm should consider the following factors while developing an advertising policy: Advertising elasticity of demand Cost of advertising Target group e.g. the youth, business community, professionals, etc. The appropriate time to advertise Means of advertising e.g. electronic or Read More …

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Extent to which advertising influences demand

October 25, 2020November 11, 2020 MJ

Advertising refers to the whole process or set of informative, educative and persuasive promotion activities aimed at influencing the perception of the consumer and therefore the effective demand for a product or service. On information, advertising is a medium through Read More …

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Meaning of Implicit and explicit costs

October 25, 2020November 11, 2020 MJ

Implicit Costs: These are costs of self-owned, self employed resources used by a firm in the process of production (abstract costs) eg. opportunity cost, individual managerial skills etc. Such costs are not fixed and it’s the owner who evaluates them. Read More …

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Meaning of Isoquants

October 25, 2020November 11, 2020 MJ

Isoquants: An Isoquant is a locus of technically efficient combinations of two factors of production their utilization from which the same level of output is produced; its slope measures the marginal rate of technical substitution (MRTS) of one factor (eg Read More …

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Meaning of Producer’s Surplus

October 25, 2020November 11, 2020 MJ

Producer’s Surplus:- is the difference between the total amount producers receive for any given quantity of a product and the minimum amount they would have been willing to accept for that quantity. It can also be defined as the gain Read More …

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Meaning Exchange rate

October 25, 2020November 11, 2020 MJ

Refers to the rate at which one currency exchanges for another that is the amount of one currency that is exchanged for a unit of another currency in a given exchange rate regime. In a fixed exchange rate regime, the Read More …

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Meaning of Choice , Scarcity and opportunity cost

October 25, 2020November 11, 2020 MJ

Scarcity being the central economic problem is defined as the inadequacy/insufficiency/inability of (economic) resources or goods and services available to satisfy them. Scarcity is therefore not the same as “few” resources. Since resources are scarce (limited in supply) it implies Read More …

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Sources of monopoly powers.

October 25, 2020November 11, 2020 MJ

Sources of Monopoly power: Exclusive ownership and control of resources (factors of production) Patent rights eg. beer brands like Tusker, soft drinks like Coca Cola etc. Natural monopoly which results from economies of scale i.e minimization of average total cost Read More …

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Instruments of monetary policy used to control and regulate money supply by the Central Banking Authorities

October 25, 2020November 11, 2020 MJ

Monetary policy works through the intermediary of monetary policy instruments such as the bank rate, open market operations (OMO), variable reserve requirement (cash and liquidity ratios), funding, marginal requirement, selective credit control and moral suasion. This policy relates mostly to Read More …

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Meaning of Monetary Policy

October 25, 2020November 11, 2020 MJ

Monetary policy refers to the manipulation of money supply, liquidity and interest rates in the economy in order to achieve increased employment, economic growth, reduced inflation and improved balance of payments.

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