Economics

There are many goods whose consumption and price are affected by other goods. These goods are known as related goods, which act as Complements and Substitutes for each other. For Instance, when you buy a Desktop, you buy a Keyboard, CPU and UPS along with it. On the contrary, a customer can also buy a Laptop instead of a Desktop. Thus, all these products are the related … [Read more...] about Complements and Substitutes

Meaning: Cartel refers to a voluntary collaboration of two or more large independent businesses through formal agreements that effectively function as one entity with a uniform price-output policy to secure a monopoly in the market. In simple words, companies with large market shares join hands to control supply and manipulate prices. Economists call this sort of … [Read more...] about Cartel in Economics

A segment of the workforce that is sufficiently educated and skilled is Jobless. It is not merely an issue but a critical macroeconomic problem for countries. Read through this post and learn the main Types and Causes of Unemployment. All non-working persons can't be called unemployed. But, a person is said to be unemployed when they are educated, skilled and willing to work … [Read more...] about Types and Causes of Unemployment

Definition: Aggregate Supply implies the monetary value of the total output that the firms are willing to produce in an economy at a general price level at a certain period. Here producers are willing and able to sell at a particular time period. We have always learned that the ultimate goal of producers is to become profitable. It is alternatively known as the … [Read more...] about Aggregate Supply

Definition: Production Function in Economics studies the mathematical relationship among the physical input and outputs of production under given technology at a certain period. In other words, it expresses the technical relationship between input and output, i.e. the number of commodities produced and variables or factors used in production. It addresses the … [Read more...] about Production Function in Economics

Do you know we are consuming more than 50% of the earth can replenish? We must mobilize towards Sustainable Consumption and Production to deal with this situation and minimize its effects. Definition: Sustainable Consumption and Production, or SCP, implies the production and usage of services and related goods that meet the needs and desires of current and future generations … [Read more...] about Sustainable Consumption and Production

Definition: Producer Equilibrium is the combination of price and output that yields maximum profit. Besides, it is the point where the producer maximizes profit or minimizes losses. Briefly, it is an output level where profit is maximum and firms have no intent to change it. It is alternatively known as Firm Equilibrium, Profit Maximization or Loss Minimization. In … [Read more...] about Producer Equilibrium

Definition: The concept of Investment Multiplier suggests that the increase in Investments will lead to income generation in multiples. In other words, the amount of Income/Output amplifies, resulting from the increase in the level of Investments. Investment Multiplier is the contribution of the famous economist John Keynes. He explained it with the help of the country's … [Read more...] about Investment Multiplier

Definition: Liquidity Preference Theory implies that Interest is an economic event determined by two factors, i.e. the Demand for Money and the Supply of Money. The great economist Lord Keynes gave this theory for Interest rate determination. Conventionally, classical theorists suggested that people only use the money for transaction motives. They keep the money to meet … [Read more...] about Liquidity Preference Theory

Definition: Consumer equilibrium is when the customer attains maximum satisfaction from his present consumption pattern with given income and prevailing market prices. Here, the customer is not likely to change his expenditure and units consumed. This is because, he derives the highest utility from the commodities purchased with the given income. First, lets us … [Read more...] about Consumer Equilibrium