For market equilibrium, P_d = P_s
25 - Q² = 2Q + 1
0 = 25 + Q² + 2Q + 1
0 = -24 + Q² + 2Q
Q² + 2Q - 24 = 0
Q² + 6Q - 4Q - 24 = 0
Q(Q + 6) - 4(Q + 6) = 0
(Q + 6)(Q - 4) = 0
So, Q = 4 or Q =-6. Since Q cannot be equal to -6,
Q = 4
When Q = 4, P_d = 25 - 4² = 9;
P₂ = 2(4)+ 1 = 9
Consumer's surplus =\(\int _{ 0 }^{ 4 }{ (25-Q^{ 2 })dQ)dQ-(9\times 4) } \)
=\({ \left[ 25Q-\frac { Q^{ 3 } }{ 3 } \right] }_{ 0 }^{ 4 }\)-36
=\({ \left[ (25)(4)-\frac { 1 }{ 3 } (4)^{ 3 } \right] }\)-(0)-36
=\(\left[ 100-\frac { 64 }{ 3 } \right] \)-(0)- 36 = 42.67
Producer's surplus Ps
(P_s) = (9 x 4) - \(\int _{ 0 }^{ 4 }{ (2Q+1)dQ } \)
= 36 -\(\left[ (Q^{ 2 }+Q \right] _{ 0 }^{ 4 }\)
= 36 - (16 + 4) = 16

Given demand function
P = 35 - 2x - x²
for x = 3
P = 35 - 2(3) - 3²
= 35 - 6 - 9
P = 20
Therefore,
CS = (Area of the curve below the demand curve from 0 to 3) - Area of the rectangle (20 x 3 = 60)
\(CS=\int_0^3(35-2x-x^2)dx=(20\times 3)\)
\(=\left[35x-2{x^2\over 2}-{x^3\over 3}\right]_0^3-60\)
\(=35(3)-2\left ( \frac{3^{2}}{2} \right )-\frac{3^{3}}{3}-60\)
= 105 - 9 - 9 - 60
= 27 Units

Introduction:
(i) The law of demand explains the direction of change in demand due to change in price.
(ii) Elasticity of demand explains the rate of change in quantity demanded due to a given change in price.
Definition:
Elasticity of demand describes the degree of responsiveness of the quantity demand for a commodity to a change in its price - Stonier and Hague.
Types:

There are four methods of measuring price elasticity of demand.
Percentage Method:
It is known as ratio method.
\(\mathrm{e_p}=\frac{\Delta \mathrm{Q}}{\Delta \mathrm{P}} \times \frac{\mathrm{P}}{\mathrm{Q}} \text { or } \frac{\% \Delta \mathrm{Q}}{\% \Delta \mathrm{P}} \text { where } \frac{\% \Delta \mathrm{Q}}{\% \Delta \mathrm{P}}=\frac{\text { Percentage change in demand }}{\text { Percentage change in price }}\)
Total Outlay Method:
Marshall suggested that this is the simplest way to decide whether demand is elastic or inelastic.
Total Revenue (Outlay) = Price x Quantity sold

Point (or) Geometrical Method:
The point elasticity in a straight line or linear demand curve is the ratio of the segments of the line to the right and to the left of the particular point.
\(Point\ elasticity=\frac{Lower\ segment\ of\ the\ demand\ curve\ below\ the\ given\ point}{Upper\ segment\ of\ the\ demand\ curve\ above\ the\ given\ point}\)

Introduction:
(i) H.H Gossen first formulated this law.
(ii) So Jevons called it "Gossen's First law of consumption"
(iii) Marshall perfected it on the basis of cardinal analysis.
(iv) It is based on the satiable character of human wants.
Definition
Marshall states the law as "the additional benefit which a person derives from a given increase of his stock of a thing, diminishes with every increase in the stock that he already has".
Assumptions
(i) Utility can be measured - 1,2,3.
(ii) Marginal utility of money is constant.
(iii) The consumer is rational. He wants maximum satisfaction.
(iv) The units consumed must be reasonable in size.
(v) The commodity must be homogeneous.
(vi) The consumption must be continuous.
(vii) There is no change in taste, habit, preferences, fashion, income & character of the consumer.
Illustration:
(i) Suppose a consumer wants to consume 7 apples one after another.
(ii) The utility from the first apple is 20.
(iii) The utility from the 2^nd apple is less than the first (15), the utility from the 3^rd apple is less than the 2^nd (10) and so on.
(iv) Finally the utility from the 5th apple becomes zero and the utility from the 6th apple is -5.

Number of Apples	Total utility	Marginal Utility
1	20	20
2	35	15(35 - 20)
3	45	10(45 - 35)
4	50	5 (50 - 45)
5	50	0 (50 - 50)
6	45	-5 (45- 50)
7	35	-10 (35-45)

Explanation:
(i) TU goes on increasing but at a diminishing rate.
(ii) MU goes on diminishing
(iii) When MU is zero TU is maximum.
(iv) When MU becomes negative, TU diminishes.
Criticism:
(i) Utility is subjective so cannot be measured numerically.
(ii) The assumptions are unrealistic.
(iii) The law is not used for indivisible commodities.
Exceptions:
(i) Hobbies
(ii) Drunkards
(iii) Readings
(iv) Misers
(v) Music
(vi) Poetry
Importance:
(i) It is a fundamental law of consumption.
(ii) It is the basis for the law of demand, elasticity of demand, consumer's surplus.
(iii) Finance Minister uses it for progressive taxation.
(iv) Redistribution of income is justified.
(v) Adam Smith uses it for his "diamond water paradox".
Conclusion:
The law of diminishing marginal utility is of great use in our daily life.

For equilibrium P_d = P_s
\(1600-x^{2} =2 x^{2}+400  \)
\(1600-400 =2 x^{2}+x^{2}  \)
\(3 x^{2} =1200  \)
\(x^{2} =400  \)
\(x =\pm 20  \)
\(P_{\mathrm{d}} =1600-(20)^{2} \)
=1600-400 
=1200 
\(\mathrm{P}_{\mathrm{s}} =2(20)^{2}+400 \)
= 2(400) + 400 
= 800 + 400 
= 1200
Consumer's surplus:
\(\mathrm{C}_{\mathrm{s}}=\int_{0}^{20}\left(1600-x^{2}\right) \mathrm{d} x-(20 \times 1200) \)
\(=\left[1600 x-\frac{x^{3}}{3}\right]_{0}^{20}-(24000)=\left[1600(20)-\frac{20^{3}}{3}\right]-24000 \)
\(=32000-\frac{8000}{3}-24000=5,333.34\)
Producer's surplus:
\(\mathrm{P}_{\mathrm{s}} =(20 \times 1200)-\int_{0}^{20}\left(2 x^{2} +400\right) \mathrm{d} x  \)
\(=24000-\left[\frac{2 x^{3}}{3}+400 x\right]_{0}^{20}   \)
\(=24000-\left[\frac{2(20)^{3}}{3}+400(20)\right]=24000-\left[\frac{2 \times 8000}{3}+8000\right]\)
= 24000-5333.33 - 8000 = 10,666.67

a) Q_t = f(Pt, Y, A, N, Pc) it means the quantity of milk demand depends on the price of fresh cow milk, the average income, advertising expenditure on processed packet milk, the price of that packet milk and the populations. These are the factors which influence the demand for fresh cow milk.
b) The independent variables are price of fresh cow milk, average household income, advertising expenditure on processed packet milk, population, price of processed packet milk.
c) Q_d = a + bP + cY + dA + eN + f Pc
a shows the value of Qd when the variables P, Y, A, N, Pc are all simultaneously =0. b, c, d, c, f are called slope parameter. They show the effect on quantity demanded of changing one of the variables P, Y, A, N or Pc while holding the rest of these variables constant.

Variable	Relation to quantity demanded
P	inverse when price of fresh milk increases, demand decreases.
Y	direct when income increases the demand for fresh milk increases.
A	direct when advertising expenditure on processed milk increases the demand for fresh milk increases.
N	direct Price of packet milk increases the demand for fresh milk increases
Pc	direct Population increases the demand for fresh milk increases.

(i) Short term goal 8.29% growth rate.
(ii) The theme was faster, sustainable and more inclusive growth. For this purpose it seeks to achieve 4% growth in agriculture 10% in manufacturing sector.
(iii) The total budget was 47.7 lakh crore which is 135% more than that of the 11th plan.
Broad Objectives
(i) To reduce poverty.
(ii) To improve living conditions for SCs, STs, OBCs, Minorities.
(iii) To improve regional equality.
(iv) To generate attractive employment.
(v) To eliminate gender gaps.
Growth indicators
(i) It aims at average GDP growth rate of 8%.
(ii) It aims at generating 50 millions work opportunities in non farm sector.
(iii) Reducing IMR to 25, MMR to 100 and Total fertility rate to 2% Achieving universal road connectivity and power for all villages.
(iv) Provision of banking services for 90% households.
(v) Major welfare benefits and subsidies via Aadhaar card.
(iv) Secondary education for all by 2017.
(vi) Increase public spending to 2.5% of GDP
(vii) Getting 5 Indian universities in the list of top 200 universities in the world.
(viii) Eliminate gender and social gap in school enrollment.
(ix) Increasing green cover by 1 million hectare every year

Introduction :
(i) Small scale industries play an important role for the development of Indian economy.
(ii) 60 - 70% of total innovations in India comes from SSIs.
Provides employment:
(i) SSIs use labour intensive techniques.
(ii) They provide employment to artisans, technically qualified persons and professionals, people engaged in traditional arts, people in villages and unorganized sector.
(iii) The employment-capital ratio is high.
Brings balanced regional development:
(i) SSIs are set up in backward and rural areas.
(ii) This promotes decentralised development of industries.
(iii) They reduce congestion, slums, sanitation and pollution in cities since they are found outside city limits.
(iv) They improve the standard of living of people in suburban and rural areas
(v) The entrepreneurial talent is tapped from different regions.
Helps in mobilization of local resources:
(i) SSIs mobilize and use local resources like small savings, entrepreneurial talent etc of the entrepreneurs which might have remained idle.
(ii) It promotes traditional family skills and handicrafts.
Paves for optimisation of capital:
(i) SSIs needs less capital. They give quick profit due to shorter gestation period.
(ii) SSIs functions as a stabilizing force by providing high output-capital ratio and high employment capital ratio.
(iii) They encourage people living in rural areas to save and channelize them into industrial activities.
Promotes export:
(i) Since they do not need sophisticated machinery, import of machinery from abroad is not needed.
(ii) There is great demand for goods produced by SSIs.
(iii) They reduce the pressure on balance of payment as they earn foreign exchange
Complements large scale industries:
(i) They provide components, parts, accessories to large scale industries.
(ii) They serve as ancillaries to large scale units.
Meets consumer demand:
(i) SSIs produce a wide range of consumer products.
(ii) They serve as an anti-inflationary force by providing goods of daily use.
Develops entrepreneurship:
(i) SSIs help to develop entrepreneurs.
(ii) They help the job seekers to become job givers.
(iii) They promote self-employment and a spirit of self-reliance.
(iv) It increases the per capita income of India.
(v) There is development of backward areas and weaker sections.
(vi) It helps in equitable distribution of income.

Introduction:
In his book "The general theory of employment, interest and money" in 1936, Keynes propounded the liquidity preference theory of Interest.
Theory:
Interest is the reward for parting with liquidity for a specified period of time.
Meaning:
Liquidity preference means the preference of people to hold wealth in the form of liquid cash and not in non-liquid assets like bonds, securities, bills of exchange, land, building, gold.
Motives:
Transaction motive:
It relates to the desire of the people to hold cash for the current transaction. M_t = f(y)
Precautionary motive:
It relates the desire of the people to hold cash to meet unexpected expenditures such as sickness, accidents, fire. M_P = f(y)
Both these motives depend on the income level.
Speculative motive:
It relates to the desire of people to hold cash in order to take advantage of market movements regarding the future changes in the price of bonds
There is inverse relation between liquidity preference and interest rate. M_s = f(i)
Determination of interest rate:

(i) The rate of interest is determined by the demand for and the supply of money.
(ii) The demand for money is liquidity preference for speculative motive.
(iii) The supply of money is determined by the policies of the government and the central bank.
(iv) The supply of money consists of coins, currency notes and bank deposits.
Equilibrium:
(i) In the short run supply of money is constant.
(ii) LP is liquidity preference curve M₂ M₂ is supply curve of money.
(iii) Both curves interest at E, which is the equilibrium point.
(iv) If LP increases from LP to L₁P₁ & money supply being constant, the interest rate increases from OI to OI₁. (fig a)
(v) Suppose LP is constant (fig b).
(vi) If supply of money is OM₂, the interest is OI₂ & if the supply of money is reduced from OM₂ to OM₃, the interest would increase from OI₂ to OI₃. If money supply increases, interest rate decreases.
Criticism:
(i) This theory does not explain the existence of different interest rates prevailing in the market at the same time.
(ii) It explains interest rate in the short-run.
Conclusion:
The Keynesian liquidity preference theory is an improvement over other theories.

Introduction:
The classical theory of rent is called Ricardian Theory of rent.
Definition:
(i) According to David Ricardo "Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil".
Assumptions:
(i) Land differs in fertility and has original & indestructible powers.
(ii) Rent depends on fertility and location of land.
(iii) There is perfect competition and is applicable in long run.
(iv) Land is used for cultivation only and there is marginal land or no-rent land.
(v) Most fertile lands are cultivated first.
Illustration:
1. Assume a group of people go to a newly discovered island and settle down there.
2. They will first cultivate the most fertile land 'A'.
3. Since land is abundant & idle they need not pay rent.
4. Given labour and capital yield per acre on 'A' grade land is 40 bags of paddy.
5. Suppose another group of people settle down in the same island. The demand for agricultural produce increases.
6. Because of the law of diminishing returns A grade land alone cannot produce all the food needed.
7. So less fertile land B is cultivated.
8. For the same amount of labour and capital only 30 bags of paddy are produced.
9. The surplus of 10 bags per acre on 'A' grade land is the economic rent of 'A' grade land.
10. If yet another group of people goes and settles down in the same island, the least fertile 'C' grade land will be cultivated.
11. For the same amount of labour and capital the yield per acre is 20 bags of paddy.
12. The surplus of 20 bags for 'A' grade land and 10 bags for 'B' grade land is their economic rent.
13. The cost of production of 'C' grade land is just equal to the price of its produce and so there is no rent.
14. 'C' grade land is 'no rent land' or 'marginal land'.
15. Land which yields rent is intra marginal land.
16. Rent is the differential advantage of the superior land over the marginal land.
Grades of Lands Production Rent  A 40 40-20=20 B 30 30-20=10 C 20 20-20=0
Diagram Explanation:
X axis- grades of land.
Y axis-yield per acre.
OA, AB, BC are grade A, B, C lands.
(i) The use of equal amount of labour and capital on each of them gives yield 40, 30 & 20.
(ii) The economic rent yielded by A & B grade land is the shaded area.
(iii) They are intra marginal lands.
(iv) 'C' grade land is no rent land.
Criticism:
(i) The order of cultivation from most fertile to least is historically wrong.
(ii) In reality rent enters into price.
Conclusion:
(i) Thus Ricardo explains how rent arises on land.

Introduction:
Rural indebtedness refers to the situation where the rural people are unable to repay the loan accumulated over a period.
Causes:
Poverty of farmers:
The vicious circle of poverty forces the farmers to borrow for consumption, cultivation and celebrations. Poverty, debt and high rates of interest hold the farmer in the grip of money lenders.
Failure of monsoon:
So it is difficult to identify good years to repay their debts.
Litigation:
(i) Due to land disputes, litigation in the court compels them to borrow heavily
(ii) Being uneducated and ignorant they are caught in the litigation process and lose their savings.
Money lenders-high interest rate:
The rate of interest charged by the local money lenders is very high and the compounding of interest leads to indebtedness of the farmer.

Introduction:
Rural economy refers to villages and rural community refers to people living in villages.
Features of rural economy:
Village is an institution:
(i) Village is a primary institution and it satisfies almost all the needs of the rural community.
(ii) The rural people have a feeling of belongingness and a sense of unity towards each other.
Dependence on agriculture:
The rural economy depends on nature and agricultural activities.
Life of rural people:
(i) Life style in village is very simple. Education, housing, health and sanitation, transport and communication, banking, roads and markets are limited and unavailable.
(ii) Rural people rely on faith, superstitions and traditional cultural practices.
(iii) The methods of production, social organization, political mobilization, rural sector is extremely weak and backward.
(iv) The incidence of alcohol drinking has gone up.
Population density:
Population density is very low. Houses are scattered in the entire village.
Employment:
There is unemployment, seasonal unemployment and underemployment.
Poverty:
(i) Basic needs of the people like food, clothing and shelter are not met
(ii) About 22 crores of people in rural areas are poor and live below poverty line.
Indebtedness:
(i) People in rural areas are highly indebted owing to poverty, under employment, lack of farm and non-farm employment opportunities, low wage employment, seasonality in production, poor marketing network.
(ii) Since formal loan facilities are not available to the villagers, they depend on local money lenders who squeeze the villagers.
Rural income
Large proportion of labourers are underemployed and the scope for increasing their income is limited.
Dependency:
Rural households are largely dependent on social grants and remittances from family members working in urban areas.
Dualism:
The co-existence of features of organised and unorganised, traditional and modern, regulated and unregulated, poor and rich, skilled and unskilled is very common in rural areas.
Inequality:
There is inequality in distribution of income, wealth and assets. Land, livestock are owned by a few people. Landlords dominate the rural activities.
Migration:
Rural people migrate from villages to urban areas for gainful employment. Lack of basic amenities in rural areas also push the people to urban areas.

Introduction:
(i) Scale of production refers to the ratio of factors of production.
(ii) Every producer wants to reduce the cost of production.
(iii) When there is large scale production he enjoy lot of advantages.
(iv) These advantages are called economies of scale.
(v) Marshall divided them into internal economies and external economies.
Internal Economies:
They refer to advantages enjoyed by a firm.
Technical Economies:
When there is large scale production, there is more capital, new technology, research and development.
Financial Economies:
Big firms can float shares in the market for capital expansion.
Managerial Economies:
(i) Specialisation of labour is followed.
(ii) There is delegation of work.
Labour Economies:
(i) There is division of labour.
(ii) Quality and productivity increases.
Marketing Economies:
(i) Producers can buy raw materials at cheaper cost.
(ii) Transport cost is less.
(iii) They enjoy bargaining power.
Economies of survival:
(i) Product diversification is possible.
(ii) This reduces the risk in production.
(iii) Even if the market for one product falls, the market for other commodities offsets it.
External Economies:
(i) They refer to changes in any factor outside the firm causing an improvement in the production process.
(ii) These advantages are enjoyed by all the firms in the industry due to the structural growth.
Example:
1. Increased transport facilities.
2. Banking facilities.
3. Development of townships.
4. Development of information and communication.

Iso and quant are derived from the Greek language, meaning 'equal' and 'quantity'.
Definition:
Isoquant curve is a locus of points representing various combinations of two inputs capital and labour yielding the same output. It is also called equal product curve or product indifference curve.
Properties:
1. The isoquant curve has negative slope:
(i) Capital is being substituted by labour.
(ii) Isoquant has negative slope because of diminishing MRTS.
(iii) Constant MRTS (straight line) and increasing MRTS (concave) are also possible.
(iv) It depends on the nature of isoquant curve

2. Isoquant curve is convex to origin:
The capital substituted per unit of labour goes on decreasing so the isoquant is convex to the origin.

3. Isoquant curves cannot intersect each other:
Point A lies on IQ₁ and IQ₂, Point C lies on IQ₂, showing higher output Point B
lies on IQ₁, showing lower output. C = A, B = A But C > B.


4. Upper isoquant curve represents a higher level of output:
Higher IQ₂ shows higher output 200 units. Lower IQ₁ shows lower output 100 units. IQ₂ means the use of more sectors than IQ₁. Arrow shows increase in output with a right and upward shift of an isoquant curve.

5. Isoquant curve does not touch either x axis or y axis:
In IQ₂ only capital is used and in IQ₁ only labour is used.

Conclusion:
These are the properties of isoquant curves.

Wind energy: Muppanthal wind farm supplies the villagers with electricity for work. Wind farms are found in Nagercoil, Tuticorin, Coimbatore, Pollachi, Dharapuram & Udumalaipettai. They generate about half of India's 2000 megawatts of wind energy. Tamil Nadu has the highest installed wind energy capacity in India. The state has very high quality of offshore wind energy potential off the Tirunelveli coast & southern Thoothukudi & Rameswaram Coast.
Nuclear energy: The Kalpakkam Nuclear Power Plant and the Koodankulam Nuclear Power Plant are the major nuclear energy plants for the energy grid.
Thermal energy: The thermal power plants are at Athippattu (North Chennai), Ennore, Mettur, Neyveli & Thoothukudi.
Hydel energy: There are 20 hydro electric units in Tamil Nadu at Hundah, Mettur, Periyar, Maravakandy, Parson Valley.
Solar energy: Tamil Nadu tops in solar power generation.

Introduction:
(i) In order to promote export and industrial growth SEZ was introduced in many countries.
(ii) India was one of the first in Asia to set up EPZ (Kandla, 1965).
(iii) SEZ covers free trade zones, export processing zones, industrial parks, economic and technology development zones, high-tech zones, science and innovation parks, free ports, enterprise zones.
Major objectives of SEZs
(i) To enhance foreign investment, to attract foreign direct investment and increase GDP.
(ii) To increase shares in global export.
(iii) To generate additional economic activity.
(iv) To create employment opportunities.
(v) To develop infrastructure facilities.
(vi) To exchange technology in the global market.
Characteristics:
(i) Geographically demarcated area with physical security.
(ii) administered by single authority.
(iii) Streamlined procedures.
(iv) Having separate custom area.
(v) Governed by more liberal economic laws.
(vi) Greater freedom to firms located in SEZs.
(vii) They need not respect the government's rules and regulations.
(viii) The social and environmental impacts were disastrous.

The Problem of Choice:
(i) The problem of choice arises because of limited resources and unlimited wants, may relate to the allocation of resources between the goods for higher income group and the lower income group and the goods for defense and the civilians.
(ii) Since PPC is the locus of the combination of the goods the problem of choice will not arises when we choose any point on PPC.
The notion of scarcity:
(i) Every economy has scarce resources which can produce only limited amount of output even with the help of best technology.
(ii) PPC reflects the constraints imposed by the element of economic scarcity.
The solution of central problems:
(i) The solution of problem of what to produce involves the decision regarding the choice of location on the PPC.
(ii) Any point inside PPC indicates that the economy is using inefficient methods of production and inefficient combination of resources.
Conclusion:
(i) Thus the basic problems of the economy are solved with the help of PPC.

Steps of Deductive method:
(i) Have a clear idea of the problem to be inquired.
(ii) Define the technical terms used. Assumptions should be precise.
(iii) Deduce hypotheses from the assumptions.
(iv) Verify hypotheses through direct observation of events and statistical methods.
Steps of Inductive method:
(i) The collected data must be systematically arranged
(ii) Based on the data, conclusions are drawn
(iii) Generalization of the hypothesis.
(iv) Verification of the hypothesis.

Introduction:
E.H. Chamberlin introduced the concept of monopolistic competition.
(i) Firm under monopolistic competition has equilibrium when MC = MR & when MC cuts MR from below.
(ii) The AR curve slopes downward and is fairly elastic.
(iii) Different firms produce different varieties of the product and sell them at different prices.
Each firm seeks to get equilibrium with regard to
1) price & output 2) product adjustment 3) selling cost adjustment
Short run equilibrium

In fig (a) OM is the equilibrium output. OP is the price.
TR = OMQP, TC = OMRS, Abnormal Profit = PQRS
In fig (b) TR = OMQP, TC = OMLR, Loss = PQLR
Long run equilibrium:

(i) In short run the firm may earn super normal profit or incur loss.
(ii) In the long run the AR is more elastic.
(iii) The firms earn only normal profit.
(iv) Equilibrium output = OM. Price = OP, AR = QM, AC = QM.
(v) Equilibrium is got when AR = AC. AR is tangent to AC at Q.

Introduction:
Few firms selling homogeneous or differentiated product is oligopoly. (eg) car, cigarette.
(i) Few large firms: Very few big firms own the major control of the whole market by producing major portion of the market demand.
(ii) Interdependence among firms: The price & quality decisions of a particular firm are dependent on the price & quality decisions of the rival firms.
(iii) Group behaviour: The firms realise the importance of mutual co-operation.
(iv) Advertisement cost: The oligopolist raises sales by advertising or improving the quality of the product.
(v) Nature of Product: Products may be differentiated or homogeneous.
(vi) Price rigidity: Prices are difficult to be changed. The oligopolistic firms do not change their prices due to the fear of rival's reaction.

Large number of buyers and sellers:
(i) Since there are large number of buyers and sellers each individual buyer or seller buys or sells a very very small quantity of the product found in the market.
(ii) So he has no power to fix the price of the product.
(iii) He is only a price taker.
Homogenous product & uniform price:
(i) All the units of the product are perfectly substitutable - they are of the same size, shape, colour, quality.
(ii) So a uniform price prevails in the market.
Free entry and exit:
(i) In the short run, the very efficient producer can produce the product at a very low cost & earn super normal profit.
(ii) This attracts new firms to enter.
(iii) When there are more firms, supply increases, so price falls.
(iv) Inefficient producer faces loss & so quits the market.
Absence of transport cost:
The prevalence of the uniform price is also due to the absence of the transport cost.
Perfect knowledge of the market:
(i) All buyers and sellers have a thorough knowledge of the quality of the product, prevailing price.
No government intervention:
(i) No government regulation on supply of raw materials & in price determination.

Average fixed cost:
1. It refers to the fixed cost per unit of output.
2. It declines as output increases as fixed cost is constant.
3. It never touches the axis.
4. It is rectangular hyperbola.

Average variable cost:
1. It is the variable cost per unit of output.
2. It initially declines and then increases with the increase of output
3. This is due to law of returns.
4. AVC curve is a 'U' shaped curve.

Average total cost or average cost:
1. It is got by dividing TC by Q or by adding AFC and AVC.
2. It is u shaped.
3. Initially it declines, reaches minimum when the plant is used optimally & rises beyond the optimum output.
4. This is due to the law of variable proportions.

Marginal cost:
1. It is the change in total cost resulting from producing one extra unit of output.
2. First it falls due to more efficient use of variable factors.
3. It increases after the lowest point and it slopes upward.
4. It is 'u' shaped.

Q (in unit)	TFC in (Rs)	TVC in (Rs)	TC in (in Rs)TFC + TVC	ATC (TC/Q)(in Rs)	AFC in(Rs)	AVC in(Rs)	ATC (AFC + AVC)(in Rs)
0	1000	0	1000	α	0	0	0
1	1000	200	1200	1200	1000	200	1200
2	1000	300	1300	650	500	150	650
3	1000	400	1400	466	333	133	466
4	1000	600	1600	400	250	150	400
5	1000	900	1900	380	200	180	380

Introduction:
(i) Gandhian economics is based on ethical foundations.
(ii) He wrote, "Economics that hurts the moral well-being of an individual or a nation is immoral and so sinful".
Village republics:
(i) To Gandhi, India lives in villages.
(ii) He was interested in developing the villages as self-sufficient units.
(iii) He opposed extensive use of machinery, urbanization and industrialization.
On machinery:
(i) Gandhi described machinery as 'Great sin'.
(ii) It is an evil and would finally end.
Industrialism:
(i) Gandhi considered industrialism as a curse on mankind and would exploit the nation.
Decentralization:
(i) He favoured production in the people's homes at a large number of places on a small scale.
Village Sarvodaya:
(i) He suggested the development of self-sufficient, self-dependent villages.
Bread labour:
(i) Gandhi realised the dignity of human labour. He believed that man should eat his bread by the sweat of his brow. Bread labour or body labour meant manual labour.
Doctrine of trusteeship:
(i) Trusteeship provides a means of transforming the present capitalist order of society into an egalitarian one.
(ii) But India today has casino and crony capitalism.
On the food problem:
(i) Gandhi was against food controls.
(ii) Such controls created artificial scarcity. Today, India tops in the world with large production of fruits, vegetables, milk, egg, meat etc.
On Population:
(i) Gandhi opposed population control through contraceptives.
(ii) He favoured birth control through Brahmacharya or self-control.
(iii) This is the remedy to over population.
On prohibition:
(i) Gandhi advocated total prohibition, regarded use of liquor as a disease.
(ii) But today many states depend on revenue from liquor sales.
Conclusion: If Gandhi's ideas are followed, India will soon become a developed nation.

Introduction:
The mineral resources in India are iron ore, coal, lignite, bauxite, mica, crude oil, gold and diamond.
Iron ore:
(i) India possesses high quality iron ore in abundance.
(ii) There is 14,630 million tonnes of hematite and 10,619 million tonnes of magnetite.
(iii) Hematite iron is found in Chattisgarh, Jharkhand, Odisha, Goa and Karnataka.
(iv) Magnetite iron is available at Western coast of Karnataka, Kerala, Tamilnadu and Andhra Pradesh.
Coal and Lignite:
(i) Coal is the largest available mineral resource. India ranks third in the world after China and USA in coal production.
(ii) The coal centres are in Bihar, W.Bengal, Madhya Pradesh, Maharashtra, Odisha and Andhra Pradesh.
(iii) Bulk of coal production comes from Bengal Jharkhand coalfields.
Bauxite:
(i) Bauxite is the main source of aluminium.
(ii) Major reserves are in East Coast, Odisha and Andhra Pradesh.
Mica:
(i) It is a heat resisting mineral - a bad conductor of electricity.
(ii) It is used as an insulator. India stands first in sheet mica production.
(iii) It contributes 60% of mica trade in the world. Mica bearing pegmatite is found in Andhra Pradesh, Jharkhand, Bihar and Rajasthan.
Crude oil:
Oil is being explored at Assam and Gujarat, Digboi, Badarpur, Naharkatia, Kasimpur, Pallaria, Rudrapur, Shivasagar, Mourn in Assam and Bay of Khambhat, Ankaleshwar and Kalol in Gujarat are the oil exploration places in India.
Gold:
There is only limited gold reserve in three gold mine regions, Kolar Goldfield in Kolar district, Hutti Goldfield in Raichur district (both in Karnataka) and Ramgiri Goldfield in Anantpur district in Andhra Pradesh.
Diamond:
(i) The total diamond reserve of 4582 thousand carats is found in Panna (Madhya Pradesh), Rammallakota of Kurnool district (Andhra Pradesh) and in the Basin of Krishna river.
(ii) The new Kimberlite fields have been discovered in Raipur and Pastar districts of Chattisgarh, Nuapada and Bargarh districts of Odisha, Narayenpet - Maddur Krishna areas of Andhra Pradesh and Raichur-Gulbarga districts of Karnataka.