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 …
Readers Question: List and briefly describe the positive and negative attributes of multinational corporations (MNCs). Multinational corporations are large companies with operations in several countries across the world. For example, Apple, Ford, Coca-Cola, Alphabet (Google) and Microsoft. Their size and turnover can be greater than the total GDP of many developing economies. Benefits of Multinational …
Summary: Capitalism is the dominant economic system because the concept of private property and freedom to pursue economic choices are deeply embedded in human nature. Also, alternatives based on co-operation, sharing and state control have many flaws and limitations making capitalism least worst option for many. Definition of capitalism Capitalism is an economic system where …
Global economic imbalances refer to an unfair distribution of resources between different countries or it may refer to a one-sided trade situation. Global economic imbalances include Balance of Payments. Unbalanced trade between different economies, e.g. US trade deficit with China Unemployment levels, e.g. high unemployment in southern Europe versus low unemployment in US, UK. Poverty …
Socialism is an economic and political ideology concerned with greater equality of distribution and proposing solutions which involve greater co-operation and social solutions. Socialism is often associated with the concept of state ownership of the means of production. The aim is to run industry in the interests of society rather than in the interests of …
In economics producers – often referred to as firms or companies play a role in using inputs (different factors of production) and producing goods and services (output). Firms play a key role in deciding what to produce and how to produce. Different types of firms Individual entrepreneurs – self-employed individuals Private companies – often small/mid-sized …
Competition is an essential element of market economies. Different firms have the freedom to attract customers based on price, quality, service and convenient. The type of competition will depend on the product and market structure. For example, in a market with many traders selling potatoes, price will be a key factor. Consumers will shop around …
