Under strict value maximization, managers only consider whether a decision increases the profits of the business without considering other community members.
Ignou ms 09 The decisions of one firm therefore influence and are influenced by the decisions of other firms. Explain with the help of an example, why assumption of constant opportunity cost is very unrealistic? However, in the long run they can get more of the fixed factors Ignou ms 09 so will move back down to the long run average cost curve.
If a firm is producing in the most efficient way possible in the long run, but they then want to expand, they will have to expand along a short run average cost curve as they will be limited by their fixed factors. Instead of Ignou ms 09 demands for the same public good, we consider the demands for a public good in different periods of the day, month or year, then finding the optimal capacity quantity supplied and, afterwards, the optimal peak-load prices.
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources.
Conversely, there can be a negative effect that shifts the supply curve to the left where a lower quantity is consumed at a lower price, ceteris paribus. We have already covered these types of costs in Macroeconomics.
The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen". Under stakeholder theory, managers consider how a decision affects other residents of the community. These are costs that must be paid; anything that you actually receive a bill for is an explicit 4.
The notion of opportunity cost plays a crucial part in ensuring that scarce 2. In any firm of your choice, try to find the effect of change in demand and change in supply on price and quantity of product. What is opportunity cost?
With few sellers, each oligopolist is likely to be aware of the actions of the others. Peak-load pricing is a pricing technique applied to public goods, which is a particular case of a Lindahl equilibrium.
But in economics demand means desire backed up by the enough money to pay for the good. Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers.
Write Short Notes on the following: Shift in Demand When there is a change of one of the factors of demand- like the price of the product and related goods, consumer preferences, or income- there is a corresponding change in the demand curve.
Implicit costs incorporate all opportunity costs and rate of returns into your cost function. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available.
Some theorists see value maximization as always conflicting with stakeholder theory. This has particular applications in public goods such as public urban transportation, where day demand peak period is usually much higher than night demand off-peak period.
Effect of change in demand and change in supply on price and quantity of product: The long run average cost curve is derived from a series of short run average cost curves and so is often described as the envelope curve.
This will lead to a higher quantity being consumed at a higher price, ceteris paribus. Only desire can not be called demand. We will come back to them later in this course, but for now we are going to focus on Explicit Costs. Value maximization and stakeholder theory are two methods of determining the goals of a business.
This can occur when the price of substitutes falls or consumers begin to lose their taste for the product. Firm value maximization is a business term. An oligopoly is a market form in which a market or industry is dominated by a small number of sellers oligopolists.
The profits are either put back into the business or given to stock holders or owners. Shift in Supply 6. Point elasticity is the price elasticity of demand at a specific point on the demand curve instead of over a range of it.
Second point is that demand is always per unit of time. In Economics we usually talk about two different types of costs, explicit and implicit. Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice".
It is the practices of a firm to make the most of their finances to maximize profits.IGNOU MS Assignments – IGNOU University has uploaded their current session Assignment of MS Programme for the session year Students of MS download all ignou assignments free of cost with downloadable link and session wise, select session and download solved assignment, you can download old session assignment for preparation for exam of ignou.
MS Management Programme ASSIGNMENT SECOND SEMESTER MS MANAGERIAL ECONOMICS School of Management Studies INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI, NEW DELHI – IGNOU MS Study Materials/Books – If you come to this page for download each course of MS Study Material so you are come at right place.
Here you will get. IGNOU MBA MS Solved Assignment - Download as PDF File .pdf), Text File .txt) or read online. IGNOU MBA MS Solved Assignment Course Code: MS Course Title: Managerial Economics. Assignment Code: MS/TMA/SEM-I/ Coverage: All Blocks.
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