Agriculture Issues

Why the indifference curves of complementary goods right angled ? Complementary goods means two goods that have their utility (use) together and if separated they have no utility at all! Take an example of pair of shoes. When they are together (right and left shoes) they have utility but if any one of them is lost, the remaining has no use at all. This was all about complementary goods. Let's check this complementary relationship.  Suppose we have, Left leg shoe (x) Right leg shoe (y) Utility 2                              2                          200 Though the utility cannot be measured cardinally we are supposing it here. In above example I have 2 pair of right leg and left leg shoe and from using them I am getting utility of 200.  If I increase left leg shoe by one,  Left leg shoe (x) Right leg shoe (y) Utility 3                            2                            200 The utility will not increase as I don't have use of the left shoe

Types of market (On the basis of Competition): A. Perfect and pure competition market Pure competition is said to exist in a market where (a) there is a large number of buyers and sellers (b) products are homogeneous and (c) there is freedom of entry and exit of buyers and sellers.  Characteristics of perfect competition market: 1. Large number of small unorganized sellers and buyers; The industry include large no. of firms (and buyers) , each individual firms supplies only small part of the total quantity offered in the market. Under these conditions each firm alone cannot affect the price in the market by changing its output. Purchasing more or less, large buyers (but unorganized) could not affect in price. 2. Product homogeneity: All the sellers in the market have a perfectly similar product to offer. Product are perfectly substitute for one another: their cross elasticity of the demand is infinite. 3. Free entry and exit of firms: No barrier to entry or exit from

What is price elasticity of supply? Price elasticity of supply is a measure of the degree of change in the supplied amount of commodity in response to the change in the commodity’s price. In simple words, it can be defined as the rate of change in supply in response to a price change. It is denoted as P or Es. Methods for Measuring Price Elasticity of Supply Basically, price elasticity of supply can be measured by two methods. These methods are Mathematical method/ Percentage method,  Geometric method, Mathematical method/ Percentage Method Percentage method or proportionate method is the commonly used method of measuring price elasticity of supply.  Price elasticity of Supply= Proportion Change in quantity supplied / Proportion change in price of commodity Price elasticity of Supply= %Change in quantity supplied /%change in price of commodity