In this article we will discuss about the central problems of an economy, also learn about their relative importance. Every nation's resources are insufficient to produce the quantities of goods and services that would be required to satisfy all the wants of its citizens. This is known as the problem of scarcity and this can be overcome by exercising choice. [...]
The following points highlight the five determinants of demand. The determinants are: 1. The Price of the Commodity 2. The Prices of Related Goods (i.e., Substitutes and Complements) 3. The Income of the Buyer 4. Tastes and Preferences of the Buyer 5. Other Factors. Determinant # 1. The Price of the Commodity: The price of a commodity is the primary [...]
These causes of increasing and decreasing returns to scale are often classified according to whether they are internal or external to the firm. The internal factors are usually subject to a certain amount of managerial control, whereas the external factors are not. Internal economies and diseconomies are those conditions that bring about decreases or increases in a firm's long-run average [...]