A merger will lead to a bigger firm and a greater market concentration. This can have both advantages and disadvantages for the public interest. A merger is likely to reduce competition and give the new firm more market power. Therefore, it will be able to increase prices leading to a decline in consumer surplus and …
A merger occurs when two firms join together to form one bigger company. Therefore, the new company will have an increased market share. However, this higher market share will have significant problems. The competition commission will be especially concerned because the new firm is likely to have more than 25% of the market share, which …
Auctions are an event where different parties can bid for the right to purchase a good or service. Auctions are seen as a potentially efficient mechanism for the sale and purchase of goods. They are used for a variety of goods, but, in particular for rare expensive goods, which are hard to price. Auctions have …
Readers Question: How do fashion retailer make profit when they offer high discounts during sales? Everyday I walk past a leading fashion clothing shop. It seems they are always very quiet except during sales periods. During sales, you can see prices discounted by 50% to 75%. How do they make profit? Firstly, the profit margin …
Example of a AQA unit 4 question from June 2007. AQA paper available here Note: Some of the data can’t be published online. This is just a short guide to answer the question. I think it lacks – more use of data and more evaluation. Explain why Free Trade is important to EU member countries …
Why do Firms Make some Goods Unattractive/difficult to buy? It may seem strange but sometimes firms purposefully want to make a good unattractive. Why is this? Tesco value products have an unattractive design. It shouts out “I’m cheap and low quality”. What happens is that customers with inelastic demand, – people who give importance to …
Crazy Regulations Which Hold the Economy BackWatch this video on YouTube There is a new window regulation which states new windows on upper stories have to be 1.1 metre off the ground because of the risk that people may fall out of them. It is argued that due to global warming people will open windows …
In the past four years, the German economy has experienced a torrid time. Whilst America has boomed, Germany has experienced the worst recession in decades, with the shock return of high inflation and falling real wages. How Germany Damaged its Own EconomyWatch this video on YouTube In the 2012 Euro debt crisis, it was southern …