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Define what market failure is and identify an example of market failure, explaining fully why it is a relevant example.

Market failure is defined as a misallocation of resources, and essentially entails that market forces are not operating effectively through the price mechanism to distribute goods and services from suppliers...
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Answered by Edward E. • Economics tutor
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[Edexcel Economics A 2015] With reference to the information provided, examine two pricing strategies an oligopolist like Sony may use to maximise profits (8).

As an oligopoly is when a group of firms have the majority of the market share, they gain price-setting power. One policy they can use is limit-pricing. In lowering the price of their goods, oligopolies are ...
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Answered by Conrad K. • Economics tutor
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To what extent would a change in fiscal policy increase real GDP for an economy?

Keynesian economists would argue if an economy incorporates an expansionary fiscal stance (where by an increase in government spending or a reduction in income tax occurs) will help elevate real GDP. Real GD...
Answered by • Economics tutor
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Explain one possible effect on the equilibrium market price of an increase in production costs for firms

An increase in production costs will result in an increase in the equilibrium price. This is because the increase in production cost means that firms will be less willing to supply and therefore there will b...
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Answered by Leonie R. • Economics tutor
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Explain how fiscal policy could be employed to pull an economy out of a recessionary gap

Fiscal policy is concerned with the manipulation of government income and government expenditure to influence the level of aggregate demand in an economy. When adopting fiscal policy measures, a government w...
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Answered by Amit K. • Economics tutor
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