Economics

Definition: The Demand for a product refers to the quantity of goods and services that the consumers are willing to buy at a particular price for a given point of time.  Types of Demand The demand can be classified on the following basis: Individual Demand and Market Demand: The individual demand refers to the demand for goods and services by the single consumer, … [Read more...] about Types of Demand

Definition: The Demand Analysis is a process whereby the management makes decisions with respect to the production, cost allocation, advertising, inventory holding, pricing, etc. Although, how much a firm produces depends on its production capacity but how much it must endeavor to produce depends on the potential demand for its product. Thus, the marketer is required to … [Read more...] about Demand Analysis

Definition: The Indifference Curve is the graphical representation of the combination of two goods, that gives equal satisfaction and utility to the consumer. Properties of Indifference Curve   Downward Sloping: An indifference curve slope downward, which means, that with the more consumption of one good the consumption of the other is to be reduced to maintain the … [Read more...] about Properties of Indifference Curve

Definition: The Indifference Curve shows the different combinations of two goods that give equal satisfaction and utility to the consumers. In other words, the indifference curve is the graphical representation of different combinations of goods (generally two), for which the consumers are indifferent, in terms of the overall satisfaction and the utility. Assumptions of … [Read more...] about Indifference Curve

Definition: An Iso-Quant curve is the geometrical representation of the different combinations of input factors employed to produce the given level of output. Types of Iso-quant Curves The iso-quant curves can be classified on the basis of the substitutability of factors of production. These are: Linear Iso-quant Curve: This curve shows the perfect substitutability … [Read more...] about Types of Iso-quant Curves

Definition: An Iso-quant curve shows the different combinations of factors of production Viz. Labor and Capital employed to yield the given level of production. Properties of Iso-quant Curve   The iso-quant curve is negatively sloped, which means, in order to have a same level of production, the more use of units of one input factor is to be offset with the lesser … [Read more...] about Properties of Iso-quant curve

Definition: An Iso-quant Curve shows all the possible combinations of input factors that yield the same quantity of production. In other words, an iso-quant curve is a geometric representation of the production function, wherein different combinations of labor and capital are employed to have the same level of output. The iso-quant curve is also known as Iso-Product Curve. … [Read more...] about Iso-quant Curve

Definition: The Constant Elasticity of Substitution Production Function or CES implies, that any change in the input factors, results in the constant change in the output. In CES, the elasticity of substitution is constant and may not necessarily be equal to one or unity. The constant elasticity of substitution production function can be shown algebraically as: Q = A [ α … [Read more...] about Constant Elasticity of Substitution Production Function

Definition: The Cobb-Douglas Production Function, given by Charles W. Cobb and Paul H. Douglas is a linear homogeneous production function, which implies, that the factors of production can be substituted for one another up to a certain extent only. With the proportionate increase in the input factors, the output also increases in the same proportion. Thus, there are … [Read more...] about Cobb-Douglas Production Function

Definition: The Linear Homogeneous Production Function implies that with the proportionate change in all the factors of production, the output also increases in the same proportion. Such as, if the input factors are doubled the output also gets doubled. This is also known as constant returns to a scale. The production function is said to be homogeneous when the elasticity of … [Read more...] about Linear Homogeneous Production Function