Answer 1
a)
The paradox of value is the obvious inconsistency that, despite the fact that water is all in all progressively helpful, as far as survival, than precious stones, jewels direction a more expensive rate in the market. This paradox is also known as diamond-water paradox.
b)
The principle of substitution:the rule that techniques for creation will change if relative costs of sources of info change, with moderately a greater amount of the less expensive information and generally less of the more costly info being utilized.
Assume the association's utilization of capital and work as of now fulfills the condition MPK/pK = MPL/pL.
A decline in the cost of capital while the cost of work stays unaltered. The least-cost strategy for delivering any yield will presently utilize not so much work but rather more capital than was required to create a similar yield before the factor costs changed.Methods of generation will change if the overall costs of variables change. Moderately a greater amount of the less expensive factor and generally less of the more costly factor will be utilized.
Principle of substitution assumes a focal job in asset designation since it identifies with the manner by which singular firms react to changes in relative factor costs that are brought about by the changing relative shortcomings of variables in the economy all in all.
c)
A legal monopoly is an imposing business model that is shielded by law from rivalry. A statutory imposing business model may appear as an administration restraining infrastructure where the state possesses the specific methods for creation or government-allowed syndication where a private intrigue is shielded from rivalry, for example, being conceded select rights to offer a specific administration in a particular locale (for example protected developments) while consenting to have their approaches and costs regulated.[1] This sort of imposing business model is normally appeared differently in relation to true syndication which is a general classification for restraining infrastructures that are not made by government.
d)
Cost plus pricing is an evaluating system in which the selling cost is controlled by adding a particular sum markup to an item's unit cost. An elective estimating strategy is esteem based pricing.
Cost plus pricing is regularly utilized on government contracts (cost-in addition to contracts), and was reprimanded for diminishing weight on providers to control direct costs, backhanded expenses and fixed costs whether identified with the generation and closeout of the item or administration or not.
Cost breakdowns must be purposely kept up. This data is important to produce exact cost gauges.
Cost plus pricing is particularly normal for utilities and single-purchaser items that are fabricated to the purchaser's determination, for example, military obtainment.
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