Economic growth is an increase in real GDP; it means an increase in the value of goods and services produced in an economy. The rate of economic growth is the annual percentage increase in real GDP. There are several factors affecting economic growth, but it is helpful to split them up into: Demand-side factors (e.g. …
There are two main strategies for reducing unemployment – Demand side policies to reduce demand-deficient unemployment (unemployment caused by recession) Supply side policies to reduce structural unemployment / (the natural rate of unemployment) A quick list of policies to reduce unemployment Monetary policy – cutting interest rates to boost aggregate demand (AD) Fiscal policy – …
Dynamic pricing is a method firms use to constantly adjust the price of goods/services depending on demand. For example, if there is a surge in demand, firms respond to the market data by increasing price. New technology has increased the scope for more variable dynamic pricing, and it is increasingly used by companies, such as …
Definition An economic good is a good or service that has a benefit (utility) to society. Also, economic goods have a degree of scarcity and therefore an opportunity cost. This is in contrast to a free good (like air, sea, water) where there is no opportunity cost – but abundance. Free goods cannot be traded …
In the run-up to the 2016 referendum, Brexit supporting economist Professor Minford wrote: “Over time, if we left the EU [hard Brexit model], it seems likely that we would mostly eliminate manufacturing , leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.”(Source) In 2012 Mr Minford said “It’s perfectly true …
Readers question: Are subsidies more effective than minimum prices when supporting farmers? Subsidies involve governments giving money direct to farmers. A minimum price is when the government ensures a legal price that prices cannot fall below that level. Minimum prices will increase incomes for farmers. Farming can see volatile prices because supply can vary and …
Price skimming is a business strategy to set a high price on entry to the market and then reduce the price over time. The logic of price skimming is to take advantage of customers who have inelastic demand and are willing to pay the high price. When these consumers have bought the good, the firm …
Penetration pricing is a strategy used by a firm who wishes to enter a new market and gain a high market share through selling at a low price. The aim of penetration pricing is to attract a loyal customer base through offering the most competitive price in the market and undercutting rivals and well-known brands. …