Costs and benefits of hosting the Olympics
A look at the potential economic and social, benefits and costs of the Olympics.
Search Results for: The example of a monopoly
Are Coffee Prices Fair?
If coffee beans cost 4 pence per cup, how can big retailers like Starbucks or Costa Coffee sell a small cappuccino for £3.00? Comment from: Is the Price of Starbucks a rip off? Is the price of Starbucks coffee a rip off you ask… I have seen on this website you have written some article …
Fixed costs
A fixed cost is a business cost that is unrelated to output. They can also be referred to as ‘indirect costs’ Whatever the output fixed costs (FC) remains constant at £300. Average fixed cost (AFC) declines with increased output Examples of fixed cost Rent on premise Cost of buying machines and factories. Salaries of managers …
Regulatory Capture
Regulatory capture is a form of government failure where those bodies regulating industries become sympathetic to the businesses they are supposed to be regulating. Regulatory capture can mean monopolies can continue to charge high prices The opposite of regulatory capture is ‘public interest theory’ – the idea that government regulation can influence monopolies to behave …
The Role of Profit in an Economy
Profit is the surplus revenue after a firm has paid all its costs. Profit can be seen as the monetary reward to shareholders and owners of a business. In a capitalist economy, profit plays an important role in creating incentives for business and entrepreneurs. For an incumbent firm, the reward of higher profit will encourage …
Benefits and costs of Sainsbury – Asda meger
Sainsbury’s and Asda have announced a plan for a merger. They argue it will lead to lower prices for customers, no job losses and is necessary to deal with the threat of new discounters like Lidl and Aldi and the impending arrival of Amazon. Others are more cautious arguing that the new firm will have …
It is OK to be selfish?
With my new book – What would Keynes do? – The brief was to write essays on how famous economists would respond to everyday questions. So for example, for the question – Is it OK to be selfish? I examined how the likes of Adam Smith, Karl Marx, Arthur Pigou and Alfred Marshall might answer this …
Effect of US steel tariffs
What would be the impact of the US placing a tariff on the import of steel and aluminium into the US A tariff on imports of foreign steel would raise the price of imported steel and encourage US firms and consumers to buy domestically produced steel instead. At the moment, American producers find it cheaper …