Before understanding the marginal productivity theory, first know what the theory of distribution. This is the neo-classical theory of distribution, which argues that the price of any input depends on its marginal productivity. Marginal productivity…
In economics, theories of distribution explain how an economy’s total wealth or national income is divided among individuals (personal distribution) and among the factors of production (functional distribution). Functional distribution focuses on the rewards paid…
Deadweight loss is defined as the loss in social welfare due to inefficiencies of the market. The market is inefficient due to government intervention and market imperfections. It is a loss in social welfare due…
Baumol developed the sales revenue maximisation model as an alternative to the profit-maximising model of traditional business. According to Baumol, in the modern corporate business, shareholders and management are two different parts of the organisation,…
Price descrimination as the different price charged by the seller (firm) to different buyers. It is an activity by a firm with at least some monopoly power to charge different prices to different buyers in…
First read the ⇒ Collusive Oligopoly Non-Collusive Oligopoly In the non-collusive oligopoly market, firms do not have the information about the exact strategy of any of the rival firms. It is a situation like a…
Concept of Public Enterprise in Nepal Public Enterprises (also called SOSs – state-owned enterprises) are those institutions that are partially or fully owned by the state. These organisations are established, owned, and managed wholly or…
According to the previously published advertisements of Rastriya Banijya Bank Limited (RBBL), Agricultural Development Bank Limited (ADBL), and Nepal Bank Limited (NBL), a notice has been published regarding the written examination schedule for the open…
It is the market structure where there is a large number of buyers and sellers and a differentiated but closed substitute product. Though the number os buyers and sellers is large, there is some degree…
It is the market structure where there is a single seller and a large number of buyers, a unique product that does not have any close substitutes, and barriers to entry. Being a single supplier,…