The supply of labour depends on various factors such as: Wages Qualifications required Non monetary benefits / costs The compensating wage differential depends on how much income is necessary to compensate for unpleasant working environment. For example, 2 jobs may have same skill requirement. But, one being a toilet cleaner may require a higher wage …
Definition of Compensation Principle This is the amount that must be paid to another economic agent to pay for their loss of economic welfare. If sufficient compensation is paid it can enable a pareto improvement to society Compensation for externalities. If a firm pollutes a river, the fishermen will lose out on income. If this …
The competition commission is the UK body set up in 1998 to regulate mergers and monopoly power in UK markets. It replaced the Monopolies and Mergers Commission. It often deals with issues referred to it by the Office of Fair Trading OFT The competition commission only makes recommendations, enforcement of rules is done by the …
Competition policy is the structures governments have in place for the regulation of markets and monopolies. Competition policy generally aims to: Prevent growth of Monopoly power Prevent abuse of Monopoly power and restrictive trading practices Investigate suspected abuses of monopoly power and recommend policy decision. Reduce barriers to entry and keep markets contestable. Competition Policy …
Definition of competitive devaluation: When a country tries to devalue its currency to increase its international competitiveness. However, this often encourages other countries to also devalue leading to only temporary increases in the competitiveness of exports. In competitive devaluation, a country only gains a temporary advantage until the next country devalues as well. Devaluation can …
Competitive markets are characterised by: Many firms as opposed to a small number Low barriers to entry and exit. – Contestable market Low profits of incumbent firms Relatively low prices. In economics we have a formal model of perfect competition. But, in the real world perfect competition is a rarity because it assumes perfect information …
Definition of Competitive Tendering When firms bid for the right to run a service or gain a certain contract. Competitive tendering became more common in the 1980s. Mrs Thatcher wanted to introduce elements of the free market into local councils. Public services which used to be run by local councils were forced to put their …
Complementary goods are products which are used together. Examples DVD player and DVD disks to play in it. Tennis balls and tennis rackets. Mobile phones and mobile phone credit for making calls. iPhone and Apps to use with an iPhone. Petrol and car. Complementary Goods and Cross Elasticity of Demand Complementary goods will have a …