Circumstances under which free market fail to achieve efficient allocation of resources : Market failure occurs when resources are mis allocated, or ...

International trade is necessary to obtain the gains that international specialization makes possible. Trade allows each individual, region or country to ...

Elasticity of demand differs from commodity to commodity. Not only that, elasticity of demand of the same commodity may be different for different persons. ...

Absolute Cost Difference: According to Adam smith, absolute differences in the cost of production of different goods across different countries is the ...

Public goods are the goods that are neither executable nor rivalrous. These are also referred to as Collective Consumption goods. They are also one of ...

The concept of consumer surplus: Availability of Substitute: More the number of substitutes of a good more convenient it is to shift to one ...

The U-shape of the LAC curve reflects the law of returns to scale. According to this law, the LAC curve initially falls as output is increased with change in ...

Movement along a demand curve : It refers to change in quantity demanded due to change in price in the same demand schedule. When price falls, then quantity ...

Commercial policy: Government policy related to the international trade is called commercial policy. A country either uses free trade policy or ...

Returns to a Scale: When all factors are increased simultaneously and ultimately the production of output also changes. Concept of returns of returns to ...