Microeconomics

Substitution effects: it is a situation whereby if there is an increase in price or decrease in income, consumers will substitute high-priced items with less expensive alternatives. Substitution effects shows the change in the consumption of goods due to the change in the prices of the products. Consumers tends to replace/substitute luxury goods with cheaper items when income decreases or price rises. However, the consumers also tend to substitute cheaper items with luxury goods when their…

Monopoly competition Is a kind of incomplete competition, so many producers sell different products to each other, so it is not the perfect substitute. In a monopolistic competition, the firm treats the price charged by its rival as a given price and ignores the effect of its own price on the prices of other firms. The monopolistic competitive market has the following characteristics: 1. There are many producers on the market and many consumers, no business can fully control the market price. 2.…

OBJECTIVE NUMBER1: TO UNDERSTAND THE MEANING AND CONCEPT OF MONOPOLY {A} Definition: Monopoly is a market structure in which there is a single seller, large number of buyers ; there are no close substitutes for the commodity it produces and there are barriers to entry. The word monopoly is made up of syllables-mono and poly.Mono means single and poly means seller. In simple words, monopoly is that market situation in which a seller has the sole right over production or sale of product and it…

Market structures refer to the interconnected characteristics or features that a market possess in regards to the strength of the buyers and sellers. Market structures further extend to product differentiation, easiness to entering or exit from the market as well as the level of collusion among these market structures. The main four basic types of market structures that do exist are monopoly, monopolistic, perfect competition and oligopoly market structures. Different market structures have…

Have you ever wondered how people with difference careers communicate and express how they feel about what they do, how they do it, or what impact they have in society and how it relates to our education? Experts from different fields might study and approach current issues. My issue is: poverty. First, we must understand what an Economist is. An Economist is a Social Scientist, expert in economics. According to “What is Economics”, economics is “the branch of knowledge concerned with the…

1) Assume that the demand curve for an imported candy bar can be expressed as € PD = 4.60 − 0.0001Q, and the supply curve can be expressed as € PS = 0.2 + 0.0003Q. a) What is the price and quantity at which the market clears? The price and quantity at which the market clears is $3.50 and 11,000 respectively. b) What is the value of the consumer surplus and the producer surplus in this market? The consumer and producer surplus are $6,050 and $18,150 respectively. The overall benefit to society…

Costs borne by a firm can fall into two categories: explicit and implicit. According to “Principles of Economics”, explicit costs are monies that are paid out in order to run the business and may include such things as wages or rent; while implicit costs “represent the opportunity cost of using resources already owned by the firm.” (OpenStax, 2014, p. 159). My husband and I operate a small business which is a martial arts school. At this company we have explicit costs, our largest explicit costs…

1. “Personalized pricing” is a one-to-one marketing strategy. With the ubiquitous nature of Internet and the large amount of personalized data that can be extracted from the consumer behavior (clickstream, search query), it is very easy for a seller to personalize a products as per the consumer and also personalize its pricing. Where the traditional sellers fail to attract price-sensitive customers because of the single-price, now same retailers can adjust the price dynamically as per its…

Value is a “dangerous word” because it can be and has been defined in many different ways. The current definition of value, according the Merriam-Webster, is “usefulness or importance.” Something that has importance or usefulness is related to a commodity with utility because a commodity doesn’t have value without utility. Value is a “dangerous word” according to Jevons because the term, value, can hold many underlying meanings that are not always supposed to be used. Three of these…

“State failure” means “the implosion of the state” according to Bates’ article State Failure. State failure is characterized by two major processes: First, “governmental predation” which means that those in power in the state abuse their position to exploit resources from others, who lake power rather then to provide security for them. Second, the state loses its monopoly of the means of force, which leads to a militarization of society. The author then addresses three contributing factors…