A look at the arguments for and against privatisation. Privatisation involves selling state-owned assets to the private sector. It is argued the private sector tends to run a business more efficiently because of the profit motive. However, critics argue private firms can exploit their monopoly power and ignore wider social costs. Privatisation is often achieved …
Vulture capitalism refers to the practice of buying up struggling firms, stripping them off their assets and enabling a few venture capitalists to make a high profit at the expense of genuine business and ordinary workers. The term originates from the Vulture bird which looks for distressed animals and then finishes them off. Vulture capitalism …
What is the digital economy? The digital economy refers to economic activity that uses electronic communication and digital technologies to provide goods and services. The main building blocks of the digital economy are The internet. This enables firms to offer goods for sale and enables consumers to browse for goods that they need. E-mail. Electronic …
The Coronavirus has already led to disruption in manufacturing output, foreign travel and consumer demand. If the virus spreads and becomes a pandemic, what will be the likely economic effects? In short, a global pandemic will have a serious supply-side impact – especially on foreign travel, manufacturing and investment. The uncertainty and decline in travel …
In recent years, there has been a growing trend toward using electronic payments rather than physical cash. This trend to a cashless society is likely to be accelerated by the Coronavirus which gives an impetus to avoiding unnecessary physical transactions. There are several advantages of a cashless society, such as a lower risk of violent …
There are a few different reasons firms may put up prices, but in each case, a business will weigh up the pros and cons. Potential reasons for increasing prices An increase in costs of production. A general increase in the price level (inflation) Competitors are increasing the price. Firms believe demand has become more price …
Explicit costs involve a transfer of money and can be recorded on a balance sheet. (e.g. purchase of raw materials) Implicit costs are related to the opportunity cost of one course of action that leads to lower income (e.g. a shop which offers space for a charity to collect money will have lower sales) Implicit …
Oil prices tend to be volatile for a few reasons. Demand varies with the economic cycle. Changes in the price of oil can be magnified by speculators who buy forward contracts Supply is quite inelastic in the short-term. Therefore, a small change in demand can have a significant impact on the price. Firms and consumers …