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What we could find: The long run price of a unique good or service available in limited quantities only differs from the long run price of a manufactured good subject Consider the following grading system for a hypothetical economics class. According to the marginal benefit and marginal cost principle, how many loaves of bread Please answer the following questions with respect to the following scenario: A price floor of milk.
Will the quantity of milk for sale change? If a profit-maximising monopolist is required to charge a uniform price across two groups of consumers, the monopolist may find it optimal to.
P a, P b , Y are the quantity demanded of apples, the price You won a free ticket to see a Drake concert. Arcade Fire is performing on the same So keeping the national budget balanced a government needs a balance in income and expenses.
When the banks need to borrow the reserves to meet their reserve requirements, the central bank charges the interest known as the discount rate. The flow of many depends heavily on the discount rate.
Banks will hold the money flow if the central bank sets the discount rate high on the other hand low interest rate will encourage the smooth flow of money and encourage the investments. When the central bank is using its instruments of monetary policy to increase the supply of money, it is said to follow the expansionary monetary policy. To the contrary, if the central bank is reducing the supply of money using the instruments of monetary policy it is undergoing contraction monetary policy.
This theory provides the information that the quantity of money and the price level are directly proportional; i. Monetarists have criticized the expansionary monetary policy stating that it only encourages households to expand, thus increasing the aggregate demand and results in increase surplus.
According to the monetarists expansionary monetary policy serves better only in the short run while in the long run it results in inflation due to the destabilization in the price level. They are of the believe that price the growth rate of the money supply and the real growth rate should be kept equal and without causing inflation or deflation the monetary policy should accommodate the increase in real GDP. Perfect competition needs five characteristics to be fulfilled to call any market perfectly competitive.
These characteristics are, all the firms should be selling the same or identical products. Have no control over setting the price. The market share is distributed among each other in small proportions. The buyers should have complete knowledge and information about the product and their prices. No entry and exit barriers. Unlike monopoly perfect competition serves better for the industry as well as for the buyers as well.
Perfect competition provides consumers with many options in selecting the products since there are many sellers and sellers have the advantage in setting the price. Also, consumers gain the bargaining power. Monopoly, unlike perfect competition, serves best for firms rather than consumers. The reasons a company enjoy monopoly are the entry barriers that discourage new firms to enter the market.
Also, there are no substitutes of the products the firm is producing that allows companies to enjoy a monopoly. Factors like patents, limited access to resources and large start up cost discourages companies to enter the market.
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