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Explain reasons why a firm would want to merge with another firm in the same industry.

One reason is that the firm can gain from asset stripping economies of scale. An example of this is the merger of the two telecommunication firms T-Mobile and Orange in 2010. These firms can gain by selling ...
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Answered by Tom G. • Economics tutor
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Economics A-Level: What is the difference between traditional economic theory and the new approach to behavioural eocnomics?

The key assumptions under traditional economic theory are that economic agents are utility-maximisers and rational in their actions. Economic agents are assumed to have compared the costs and benefits of alt...
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Answered by Shivani S. • Economics tutor
19322 Views

Explain how to calculate Price Elasticity of Demand

Elasticity is just a technical term for "Sensitivity" so Price Elasticity of Demand (PED) simply measures how sensetive Demand is to a change in price. As demand changes can be measured in anything...
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Answered by Mark W. • Economics tutor
4013 Views

How would a policy of monetary expansion effect the domestic economy in the short term?

To answer this question we firstly need to remind ourselves of the core components of Aggregate Demand (AD): AD = C + I + G + (X-M) AD is made up of Consumption, Investment, Government Spending and the net e...
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Answered by Caspian C. • Economics tutor
2332 Views

Explain the meaning of opportunity cost?

The benefits foregone of the next best alternative.
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Answered by Alessio O. • Economics tutor
2535 Views