Economics is the study of the economic behavior of individuals concerning scarcity and choices. Economic interaction takes among people when they exchange goods within the framework such as firms, government, or the economy. The broader institutional framework in which or within which economic interactions take place in a country is known as the economy.
Major Economic Systems Read More »
Meaning of Equilibrium The term equilibrium is defined as states in which at least two different opposite forces or powers are equal. Thus, equilibrium means a state of balance. Concerning the market, equilibrium is the position in which market demand for a commodity is exactly equal to the market supply of that commodity. This equality
Introduction to Partial and General Equilibrium in Economics Read More »
Profit maximization is one of the most important assumptions of economic theory. In economics, it is always assumed that a firm’s rationality is the maximization of profit. It means, rational producer or entrepreneur always attempts for profit maximization. Thus profit maximization constitutes a central and crucial concept in the theory of the firm.
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Resources are scarce and they have alternative usages so that there arises the problem of choice regarding the use of these resources. This scarcity has always been with us and will be with us till eternity. Scarcity occurs among poor people as well as among rich people. It applies to everyone and every nation because there will never be enough of everyone that people want to have.
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Meaning of Microeconomics Generally, the subject matter of economics is broadly divided into two main branches. They are microeconomics and macroeconomics. These two words become everyday words nowadays. Microeconomic analysis and macroeconomic analysis are now considered two important approaches to economic analysis. The terms ‘micro’ and ‘macro’ were first used in economics by Norwegian economist
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The term profit in economics differs from that generally used by the business community. A business profit is an accounting profit or accounting concept of profit and presents the residual sales revenue to the owners of the business firms after making payments to all purchased factors or resources used by the firm belonging to other persons.
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Scientific research refers to the process of conducting research. It means the research which is conducted with some scientific characteristics is called scientific research. Scientific research is not any special type of research nut it is different than general research. Any research can be scientific research if it has followed the scientific attributes.
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Research is a procedure that includes a sequence of steps needed to gather and examine the information to boost and amplify the understanding and consideration of a particular topic or issue. It involves a major four steps as posing a question, setting hypothesis, collecting data to analyze the posed issue, and presenting answers to the posed question. It is s method of searching for facts in any branch of knowledge.
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Financial management functions are mainly viewed from two approaches as traditional function or role and the new role or functions. Raise of funds is taken as a traditional role or function whereas raise and allocation of funds are taken as a new role of financial management or finance managers. The first approach confines the functions of financial management is the procurement of funds only and ignores the utilization of funds whereas, the second approach not only focuses on the procurement of funds but effective utilization of funds as well.
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The business organization produces goods not for the charity rather for generating profits. In a dynamic and free-market economy, profit is only the major stimulating factor for new innovation and new products. The rate of profit in the economy gives a signal to producers to change their rate of output or to leave or to join the industry.
Functions of Profit in Managerial Economics Read More »