INSURANCE AND BANKING
Shackle’s Profit Theory Professor Shackle has extended Prof. Knight’s theory by introducing expectations under conditions of uncertainty. According to Shackle, expectations are of two types: general and specific. General expectations relate to general variables...
Profit Theory of Bearing Uncertainty Professor Frank H. Knight considers profit as the reward for bearing those risks and uncertainties which cannot be insured. He distinguishes between insurable and uninsurable risks. Some risks can...
Profit Theory – Risk The risk theory of profit is associated with the name of F.B. Holley, who considers risk taking to be the main function of the entrepreneur. Profit is the residual income...
Gross Profit and Net Profit Profit is the difference between the total revenue and total cost of a commercial and industrial concern. In this regard it is important to note that the term total...
Schumpeter’s Innovation Profit Theory Professor Schumpeter considers that profits arise from dynamic changes resulting from innovation. To begin with, he takes a capitalist closed economy in static equilibrium. A ‘circular flow’ that repeats itself...
Major theories of profit = Dynamic Theory In 1900, Professor J.B. Clarke propounded the dynamic #1900 theory of profit. According to him, the difference between the price of the commodity and the cost of...
Meaning and Definition of Profit The main objective of every commercial and industrial establishment is to earn profit. Aiming at earning profit by all business activities is a measure of the success and progress...
Basic Concepts of Managerial Economics The future is always uncertain. Management takes many decisions and prepares plans for the future with a realistic understanding. In this, management is helped by some basic concepts and...
Scope of Managerial Economics The scope of managerial economics is narrower than economic theory because economics is related to both micro and macro economics whereas the scope of managerial economics is limited to micro...
Relationship between Management Economics and Other Subjects (i) Management Economics and Operations Research- Management Economics and Operations Research both are related to effective decision making. Both are related to the best way of achieving...