Brief History of Unemployment in America Unemployment is one of the most debated problems in the United States since early the 19th century. It has been calculated that since 1948, the unemployment rate has been increasing at a rate of 5.7 percent. 10.80 percent was the highest rate of unemployment ever experienced in America while … Read More “Causes, Consequences and Solutions of Unemployment in America” »
A perfectly competitive market occurs when there are several sellers and producers selling identical products and no single producer can control prices. It is a type of economic structure where the market prices are at equilibrium and are determined by market forces of demand and supply. A perfectly competitive market is one in which all … Read More “Characteristics of Perfect Competition” »
Mixed economic system is one which incorporates the elements of both a free market system and centrally planned market system. In this case, the interaction of market system such as demand and supply are allowed to guide the market but the government interferes by controlling some activities in the market through a planned allocation and … Read More “Advantages and Disadvantages of a Mixed Economy” »
Introduction In the current world environment, there are less economic restrictions across borders and the volume of capital transfer from one country to another is increasing. As a result, exchange rates have become important economic policies in various countries. Exchange rate policy may therefore affect the monetary policy of various countries. Specifically, small open economies … Read More “Exchange Rate Relevance for Monetary Policy Making: A Case Study of Iceland” »
Two or more similar business companies may decide to combine their businesses into one large company. These are what are referred to as mergers. This may be for several reasons which include an aim to compete with other companies and get as much as possible market share (Schinkelet al, 2010). Companies may also merge or … Read More “Effect of mergers on the welfare of society” »
What is price elasticity of demand? How is price elasticity of demand calculated? How is price elasticity of demand represented in a graph? How is price elasticity of demand used in management to make pricing decisions? Find out Below: Price Elasticity of Demand Price elasticity of demand is the degree of responsiveness of the quantity … Read More “Price Elasticity of Demand” »
What is Elasticity of Demand in Economics? In economics, elasticity refers to the sensitivity of one economic variable in response to a change in another variable. It relates to the degree to which a variable changes as another variable is changed. For example, how higher will the price of a commodity go when the demand … Read More “Elasticity of Demand” »
Anticompetitive behavior refers to a set of activities or business practices carried out systematically by a firm or group of firms or government institutions to restrict competition in the market. Some of the anticompetitive behaviors are described below. Dumping – this is a process in which a company sells its products in a competitive market … Read More “6 Examples of Anticompetitive Behaviors” »
1. Profit maximization scenario A monopoly like the large telecommunications company is a business that has no competition in the market. Profit maximization for a monopoly is mainly a revenue maximization scenario (Samuelson, 2001). As shown in the figure below, the profit maximizing point is the point where marginal revenue is equal to the marginal … Read More “Profit Maximization in a Monopoly” »
How is your dog related your neighbor’s education? How does pollution from a nearby factory affect your health? When an individual, government or private company engages in a mega project, it may cause unintended costs and benefits to other people. The indirect effect of an activity to a society can have negative or positive outcome … Read More “Positive and Negative Externalities” »
What is Capitalism in Economics? Capitalism can be defined as an economic model in which individuals in a society can own and control capital goods. As opposed to socialism where the economy is centrally planned, capitalism involves a free market approach in which the forces of demand and supply determine the price mechanism of the … Read More “Capitalism: Definition, History, Characteristics, Benefits and Challenges” »
What is Socialism? The term socialism is often used interchangeably with communism. There are different perspectives and definitions of socialism. Based on its dictionary definition, socialism refers to a theory of social organization which advocates for the ownership, distribution and exchange of the means of production by the community as a whole. It is also … Read More “Socialism: Definition, Characteristics and Weaknesses” »
