Question

Define profit accelerator

Answer 1

The accelerator theory is an economic postulation whereby companies' investments increase when either demand or income increases. The theory also suggests that when there is an excess of demand, companies can meet the demand in two ways; either decrease demand by raising prices or increase investment to meet the level of demand. The accelerator theory posits that companies typically choose to increase production, thereby increasing profits. This growth, in turn, attracts additional investors who also accelerate growth.

Answer 2

Answer:

the accelerator theory is an economic postulation where by companies investment increase . which either demand or income increase, the theory also suggest that when there is an excess of demand , companies can meet the demand in 2 ways either decrease demand by raising prices or increase investment.

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