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Why is a certain level of inflation desired?

Inflation is a sustained increase in the price level. That is, the percentage increase in the price level over a period of time. Normally, we use the Consumer Price Index (CPI) as the indicator of inflation....
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A product with perfectly elastic supply has sales of 100 units per week at a price of £2 per unit. Price elasticity of demand is(-)1 .5 over the relevant range. The government imposes a tax 20%. What will be the government’s weekly tax revenue?

£28
JI
Answered by Jamie I. • Economics tutor
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1) Evaluate potential strategies that could be adopted by an economy that is heavily dependent on primary products to aid development (25 marks)

Primary product dependency can be defined as the sole reliance on the exporting of commodities. Angola, for example, is largely dependent on the extraction and exporting of crude oil, with the oil sector acc...
BK
Answered by Bryanna K. • Economics tutor
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Why does the MC Curve cut the AVC curve at the AVC Curve’s lowest point?

When marginal costs start to rise, starting at point C, due to diminishing returns, the average variable cost is still decreasing, at point X. The average variable cost will continue to decrease as long as t...
CM
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Why are Monopolies able to profit maximise?

Essentially there are several features of a market structure which determines why monopolies are able to profit maximise. Very small number of sellers in the given market, In a pure monopoly there is only on...
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