My ECO Paper...
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●๋•ιмяαη αℓι●๋•
May 30, 2010, 4:47:13 AM5/30/10
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Salam.... my ECO paper... ( Specail thanks to Salman and Laiba )
mcqs ..... 40% new .... 60% from Current and old papers...
Subjective portion
1. What is concentration Ratio.. ( 3-marks )
Answer:
Concentration ratio is used to assess the level of competition in an industry. It is simply the
percentage of total industry output that is produced by the five largest firms in the industry.
2.Differentiate between external economies of scale and external diseconomies of scale with the help of examples.
ANSWER:
EXTERNAL ECONOMIES of Scale:
External economies are benefits accruing to any one firm due to actions or the presence of other firms.
This type of economy occurs when an industry is heavily concentrated in a particular area.Economies is available to all firms for example construction of roads
EXAMPLE:
advertising by a rival industry, setting up of credit information bureaus by banks
External dis-economies of scale :
These are the forces which causes the large firms to produce goods and services at increased per unit costs.
EXAMPLE:
when an industry grows larger and shortage of skilled laor taking place and shortage of raw materials are the types of external diseconomies.
When a firm become large then supervision of workers become difficult and problem is created for management is taking place which cause adverse effect on efficiency.
3rd Question... what are the different approaches for profit maximization?
Answer:
Profit maximization can be studied using the TR-TC approach and the MR-MC approach.
i. In the TR-TC approach, it is assumed that firm is price maker and firm is
operating in short run. Total profit is the vertical distance between TR and TC.
ii. In the MR-MC approach, two steps are followed to identify maximum profit. First:
the profit-maximizing output is identified – this is the point where MR cuts MC.
Second: the size of maximum profit is calculated using AC and AR curves.
TR & TC APPROACH
According to this approach, profit is maximized at that point where the difference between total
revenue & total cost is maximum
MR & MC APPROACH
According to this approach, profit is maximized at the point where MC=MR.
Best Wishes to All of U.....
May Allah has All His Blessings Upon You!!!
=====================================
You can chat with Me at:::
ali_...@yahoo.com
candle....@gmail.com
With Regards!!!
Imran Ali
MBA 2nd Semester.......
Dera Ismail Khan.
mcqs ..... 40% new .... 60% from Current and old papers...
Subjective portion
1. What is concentration Ratio.. ( 3-marks )
Answer:
Concentration ratio is used to assess the level of competition in an industry. It is simply the
percentage of total industry output that is produced by the five largest firms in the industry.
2.Differentiate between external economies of scale and external diseconomies of scale with the help of examples.
ANSWER:
EXTERNAL ECONOMIES of Scale:
External economies are benefits accruing to any one firm due to actions or the presence of other firms.
This type of economy occurs when an industry is heavily concentrated in a particular area.Economies is available to all firms for example construction of roads
EXAMPLE:
advertising by a rival industry, setting up of credit information bureaus by banks
External dis-economies of scale :
These are the forces which causes the large firms to produce goods and services at increased per unit costs.
EXAMPLE:
when an industry grows larger and shortage of skilled laor taking place and shortage of raw materials are the types of external diseconomies.
When a firm become large then supervision of workers become difficult and problem is created for management is taking place which cause adverse effect on efficiency.
3rd Question... what are the different approaches for profit maximization?
Answer:
Profit maximization can be studied using the TR-TC approach and the MR-MC approach.
i. In the TR-TC approach, it is assumed that firm is price maker and firm is
operating in short run. Total profit is the vertical distance between TR and TC.
ii. In the MR-MC approach, two steps are followed to identify maximum profit. First:
the profit-maximizing output is identified – this is the point where MR cuts MC.
Second: the size of maximum profit is calculated using AC and AR curves.
TR & TC APPROACH
According to this approach, profit is maximized at that point where the difference between total
revenue & total cost is maximum
MR & MC APPROACH
According to this approach, profit is maximized at the point where MC=MR.
Best Wishes to All of U.....
May Allah has All His Blessings Upon You!!!
=====================================
You can chat with Me at:::
ali_...@yahoo.com
candle....@gmail.com
With Regards!!!
Imran Ali
MBA 2nd Semester.......
Dera Ismail Khan.
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