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What are the objectives of a firm?

A firm can have a number of objectives some of which can carry drawbacks. (All these objectives can also be accompanied with diagrams.) 1.Profit Maximisation ( at the point MC=MR) this keeps shareholders hap...
SL
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Why do some argue that there is a trade off between unemployment and inflation?

When aggregate demand increases from AD1 to AD2, frms are unable to meet the growing demand with their current stocks and so start to expand output. This requires them to employ more workers. Thus, unemploym...
VL
3200 Views

List and explain some ways in which a monopolistic firm can use it's lower costs as a barrier to entry.

Monopolistic firms often experience Economies of Scale which makes their average total costs lower than competitors. This can create significant abnormal profit and can create barriers through: Predatory pri...
RB
Answered by Reubin B. • Economics tutor
3592 Views

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?

Oligopolies are interdependant as the success of their price strategy relies on the reaction of other oligopoly firms in the market. If an oligopoly decided to increase the price of it's output, they would o...
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Answered by Reubin B. • Economics tutor
32663 Views

Explain how the diagram for a perfectly competitive firm demonstrates static efficiency.

Productive efficiency can be demonstrated by the firm's price relative to the Short Run Average Total Costs curve. By selling output at P 1 , (where MR=MC), it is selling at the minimum point on the SRATC cu...
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Answered by Reubin B. • Economics tutor
5384 Views