During the Great Depression, US unemployment rate rose from virtually 0% in 1929 to a peak of 25.6% in May 1933. This was the equivalent of 15 million people unemployed. Though this unemployment rate also excluded those on reduced hours or migrants/women not eligible to officially sign on for benefits. The unemployment caused serious economic …
Monopoly power occurs when a firm has a dominant position in the market. A pure monopoly is when one firm has 100% of the market share. A firm might be considered to have monopoly power with more than 25% market share. The main benefits of monopolies include Economies of scale – lower average costs and …
Readers Question: evaluate the economics for and against the uk government further increasing the tax on alcohol in order to reduce its consumption? Alcohol is considered a demerit good. Overconsumption can cause health problems, which involve external costs to the rest of society. Therefore, there is a strong reason to increase tax on alcohol, reduce …
Globalisation refers to the increased integration of the world economy. The process of globalisation involves increased trade, greater mobility of labour and capital and the increased interdependence of national economies. There are many aspects of globalisation that are irreversible. Improvement in transport and communication. Air travel has made it easier for people to travel around …
Deflation is defined as a fall in the general price level. It is a negative rate of inflation. The problem with deflation is that often it can contribute to lower economic growth. This is because deflation increases the real value of debt – and therefore reducing the spending power of firms and consumers. Also, falling …
Organic food is increasingly popular. In the UK, sales of organic food and drink is worth £1.96bn. But organic food still has only 1.4% share of the food and drink market (Soil Association) – with higher prices discouraging many shoppers. Organic food also attracts a hefty premium over non-organic food. In 2016, in the US, …
The great recession refers to the economic downturn between 2008 and 2013. The recession began after the 2007/08 global credit crunch and led to a prolonged period of low/negative growth, rising unemployment and a period of fiscal austerity. In particular, the great recession highlighted problems within the Eurozone which experienced a double-dip recession and high …
There are different diagrams that you can use to explain 0ligopoly markets. It is important to bear in mind, there are different possible ways that firms in Oligopoly can behave. 1. Kinked Demand Curve Diagram In the kinked demand curve model, the firm maximises profits at Q1, P1 where MR=MC. Thus a change in MC, …