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Assignment Set – 1


  1. Why demand curve slopes downwards? What are its exceptions? 4+6

Ans 1.

The demand curve, a fundamental concept in economics, typically slopes downward. This pattern reflects the inverse relationship between the price of a good or service and the quantity demanded by consumers. In other words, as the price of a product decreases, the quantity demanded generally increases, and vice versa. This downward slope can be attributed to several economic principles and behavioral responses, which include the substitution effect, the income

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  1. Why demand curve for a firm in perfectly competitive market is horizontal whereas it is downward sloping in imperfectly competitive market. 5+5

Ans 2.

In the realm of economics, understanding why demand curves differ in shape between perfectly competitive and imperfectly competitive markets is fundamental. This exploration sheds light on the differing market dynamics and the strategic positioning of firms within these markets.

Demand Curve in



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  1. Explain the different types of cost with suitable example. 10

Ans 3.

In economics and business management, the concept of cost is multifaceted, reflecting various aspects of spending incurred by organizations or individuals. These costs are categorized based on their characteristics and the context in which they occur. Below are some key types of costs, each illustrated with examples to facilitate a clearer understanding:

  1. Fixed Costs

Fixed costs are expenses that do

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Assignment Set – 2




  1. Write down the ways to control inflation of a country. 10

Ans 4.

Strategies to Control Inflation in an Economy

Inflation, characterized by a sustained increase in the general price level of goods and services in an economy, can have a significant impact on economic stability and purchasing power. Governments and central banks use various strategies to control inflation. These measures are crucial for maintaining economic stability and can be broadly categorized into monetary policies, fiscal policies, and



  1. Summarize the different objectives of pricing policies. 10

Ans 5.

Pricing policies are fundamental for businesses as they directly impact revenue generation, market positioning, and overall strategic goals. Different pricing objectives guide how a company sets its prices, and these objectives can vary based on the company’s market, product life cycle, and competitive environment. Here are several key pricing objectives that companies might prioritize:


  1. Define and discuss the importance of consumption function and saving function in detail. 10

Ans 6.

The consumption function and the saving function are fundamental concepts in economic theory, particularly within Keynesian economics. These functions provide insight into the spending and saving habits of individuals and play a crucial role in determining the overall economic activity and growt