Top answers

What is the law of diminishing (marginal) returns?

This a fundamental for theory of the firm. It explains the shape of the marginal product (MP) curve! Formal Definition: When one or more factors are held fixed, there will come a point beyond which the extra...
YA
Answered by Yasmin A. • Economics tutor
9772 Views

Do only monopolies have monopoly power?

Monopoly power is commonly associated with oligopolists and not just monopolists. Firms in these markets use their monopoly power to construct entry barriers such as hugely expensive advertising campaigns th...
BP
3689 Views

What is elasticity of demand and how do you work it out?

Elasticity of demand, or more formally Price Elasticity of Demand (PED) is a measure of the extent to which the amount of a good demanded by consumers varies with response to a change in its price. It can be...
NC
Answered by Noah C. • Economics tutor
11436 Views

If John’s elasticity of demand for burgers is constantly 0.9, and he buys 4 burgers when the price is £1.50 per burger, how many will he buy when the price is £1.00 per burger

We are using elasticity to find quantity, instead of the other way around. We will plug in what we know, and solve from there. Elasticity = And, in the case of John, %Change in Quantity = (X – 4)/4 Therefore...
MS
Answered by Matthew S. • Economics tutor
5812 Views

Why is the concept of the “marginal “ so important in economics?

“Marginal” in economics means “additional” and “extra”. It is the idea that firms may take decisions by considering the effect of small changes from the existing situation. Economists rely heavily on the ide...
TC
Answered by Tiffany C. • Economics tutor
30036 Views