TP Total product, MP Marginal product and AP Average product
Ajit Kumar Total product: It is total output produced by all the units of a variable factor used in the production process along with some portion of the fixed factors. For example,…
Ajit Kumar
Production function
Production function is a concept in economics that describes the relationship between inputs (factors of production) and the output of goods and services. In order to produce any commodity, we…
Consumer Equilibrium
Assumptions of IC Analysis of Consumer’s Equilibrium Two Conditions of Consumer Equilibrium: This condition states that at only the point where IC and budget line are tangent to each other…
Consumer’s Equilibrium
Understanding the law of diminishing marginal utility is crucial for economists and businesses when analyzing consumer behavior, setting prices, and predicting how changes in factors like income or prices might…
Law of Diminishing Marginal Utility
The law of diminishing marginal utility states that as more and more units of a commodity are consumed, the marginal utility derived from every additional unit must decline. This means…
Relationship between Total utility and Marginal utility
Quantity of Ice cream Total utility Marginal utility 0 0 – 1 10 10 2 18 8 3 25 7 4 31 6 5 31 0 6 29 -2
Consumer equilibrium
Consumer equilibrium refers to a situation when the consumer’s satisfaction from a commodity equals the amount that they are paying to purchase the commodity. Price can be easily measured, however,…
Understanding Microeconomics: An Introduction to the Study of Individual Economic Behavior
Microeconomics is a branch of economics that focuses on the study of individual economic behavior. It is concerned with the decisions made by individuals, households, and firms, and how these…
Foreign exchange
It is the rate, at which domestic currency is exchanged for foreign currency. For Example 1$= 70 Indian Rupee. Exchange rate system can be constituted as: Fixed Exchange rate system…
Understanding the Balance of Payments*
The statement which holds all the transactions of a country’s foreign trade with other countries for a specified period of time, is called balance of payment. According to Kindleberger, “Balance…