ECONOMICS (CBSE/UGC NET)

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ECONOMICS

MARKET FAILURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The demand for capital goods such as plant and machinery is said to be an example of derived demand because the demand for capital goods depends on:
A
the productivity of capital goods.
B
the volume of consumer goods purchased.
C
the price of capital goods.
D
the amount of labour employed by a firm.
Explanation: 

Detailed explanation-1: -Among the key factors influencing demand for capital goods are the price of capital goods, price of other factors of production, profit levels, corporation tax, income, interest rates, confidence levels and advances in technology.

Detailed explanation-2: -In accounting, capital goods are treated as fixed assets. They’re also known as “plant, property, and equipment.” Capital goods are one of the four factors of production. This means that businesses cannot run without them.

Detailed explanation-3: -What Are Capital Goods? Capital goods are physical assets that a company uses in the production process to manufacture products and services that consumers will later use. Capital goods include buildings, machinery, equipment, vehicles, and tools.

Detailed explanation-4: -Capital goods are the assets used by businesses in the course of producing their products and services, and can include buildings, machinery, tools and equipment.

There is 1 question to complete.
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