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Describe the impact of a close competitor lowering the price for their good has on the price and output of a firm, use a demand-supply diagram to help explain your answer.

If a competitor firm lowered the price of their good, assuming the cross price elasticity of demand (XED) for the two goods is positive, then demand will fall as consumers switch to the competitor's goods. t...
LG
Answered by Lewis G. • Economics tutor
1684 Views

If we see the MPC decrease interest rates, what effects should we see in the economy

Decrease in IR --> decrease in savings by households due to high opportunity cost of saving --> increase in consumption (C)--> AD (right shift)--> economic growth & potentially inflation (dep...
NM
Answered by Nirav M. • Economics tutor
1745 Views

How do you write good analysis chains of reasoning?

Good structure is essential for good economics essay marks.Following the BLT route is a good way to show clear understanding. BLT = Because Leads to, therefore and can show how you have gone from knowledge t...
TB
Answered by Thomas B. • Economics tutor
5433 Views

What is meant by comparative advantage?

Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost than another country. Opportunity cost is the 'next best alternative forgone'. So for simplicity l...
ZT
Answered by Zoe T. • Economics tutor
2429 Views

Evaluate the effect of UK inflation on a niche clothing boutique in UK.

Inflation can be described as the constant tendency for price levels to rise in an economy. There are many factors involved which determine the overall effect of inflation on a business. Firstly, an increase...
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Answered by Sakina T. • Economics tutor
2012 Views