Supply and demand

competition price and quantity are determined by the intersection of the demand and supply curves which is known as equilibrium where as in monopoly the equilibrium quantity falls, and the equilibrium price rises. In contrast, monopoly market profit maximise quantity is at the point where the marginal revenue (MR) curve intersects the marginal cost (MC) curve and the profit-maximizing price is determined by the point on the demand curve that corresponds to this quantity. This situation of the…

new sets for most themes every six months. When a set is retailed it has an average shelf life of two years during which the price elasticity of demand remains fairly inelastic. During these two years there are many sets to choose from, choice becomes limited for an individual consumer because products are expensive. It is because of this that the demand is inelastic on the whole for an average consumer because he or she cannot afford to buy multiple sets. Moreover, even though there are many…

These are the effects of the theory of supply and demand and adjusting to inflammation. As Barack Obama stated: “A basic moral principle that most Americans agree on is no one who works a full time job should live below the poverty line, nor should their family. Yet over time we’ve seen significant…

have come under the influence or direct control of the public sector. A free trade economy requires that all property be owned by private individuals and all goods and services be privately provided. Prices are allowed to fluctuate based on supply and demand, and all transactions are voluntary, not compelled or restricted by the government. Conversely, a mixed economic system has elements of both free trade and planned economic control by government. There are several different ways market…

Adam Smith’s Theory of Economic Development According to Hunt (2002), Smith’s introduction of his theory revolves around the fact that the manner in which humans produce and redistribute the material necessities of life determines the personal and class relationship within society. While there are several concepts that explain the progression of this theory, our attention is directed mainly to three aspects: the four stages of economic development, the division of labor, and the establishment…

The conflicting and perplexing observation that water, which is more useful than diamonds, is priced lower than diamonds was proposed by economists in the 1800s as a means of understanding the role utility plays in the demand and price of a good by differentiating between total utility and marginal utility. Adam smith is considered to be the first presenter of this paradox. The diamond - water paradox states that even though water which is relatively more useful for human activity (it is…

eliminate negative externalities caused by the usage of sugary drinks yet, there are numerous issues connected with imposing a tax. The term sugary drink refers to a large group of drink, so unlike the article suggests, the demand for sugary drinks are inelastic. If the demand is inelastic then taxes will not affect on the quantity demanded. The quantity demanded will not reduce to socially efficient level, but the UK's government revenue will be raised. As a result, the government will not…

farmers are now required to pay tax on every cow which they use for dairy production, they will need to increase the price which they sell it to consumers at. This would mean that there would be a lower amount demanded by consumers, following the law of demand. Reducing output even more. This is because producing at a high output is not affordable as they do not have the quantity demanded to match it. This policy therefore does what is was developed for, reducing output and increasing the amount…

and the quantity produced will be lower than the equilibrium price and quantity of the market. The efficient equilibrium for a monopolistic market is where the average revenue equals marginal cost (AR=MC). The MC serves as the supply curve while the AR represents the demand curve. At the point where MR=MC, there is no proper maximisation of the surpluses for both consumers and…

business” to “multimedia business creation”. Technology push and demand pull perspectives in the technology innovation sector considered one of the biggest factor in the market. In order to analysis innovation sources there are several techniques can be used such as “factor analysis, multidimensional scaling, and pathfinder analysis” (Di Stefano, Gambardella, & Verona, 2012). Growing number of innovation and technology generated pure demand towards pull perspective (Di Stefano et al., 2012).…