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Tag archives for Frictional Theory of Economic Profits

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FACTORS AFFECTING ENTREPRENEURIAL GROWTH

the following factors affecting the entrepreneurial growth. 1.  ECONOMIC FACTORS a) Lack of adequate overhead facilities: Profitable innovations require basic facilities like transportation, communication power supply etc. They reduce cost of production and increase profit. b) Non availability of capital Inventions are capital oriented. In less developed countries most capital equipment have to be imported ...
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Frictional Theory of Economic Profits

One explanation of economic profits or losses is frictional profit theory. It states that markets are sometimes in disequilibrium because of unanticipated changes in demand or cost conditions. Unanticipated shocks produce positive or negative economic profits for some firms. For example, automated teller machines (ATMs) make it possible for customers of financial institutions to ...
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