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Why are monopolies inefficient?

Monopolies happen when a single firm or a single producer is the only supplier in the economy. It is thus able to fix the price of its products/ goods and/or choose the quantity that will maximise its profit...
CA
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Explain the meaning of the law of demand; distinguish between movements along and shifts of the demand curve.

The law of demand states that: 'as a product's price falls, the quantity demanded of the product will rise, ceteris paribus'. In other words, price and quantity demanded of a good are inversely related. This...
TD
Answered by Tom D. • Economics tutor
2777 Views

Explain why the economy always returns to Yf in the new classical model.

Graph to accompany answer The economy is initially in equilibrium where LRAS = AD = SRAS. Real output is Yf and the average price level is P. If there is a decrease in government spending in the economy, the...
TA
Answered by Tolu A. • Economics tutor
4579 Views

Evaluate the extent to which policies to increase economic growth may conflict with the objectives of other policies (20)

Economic growth is an increase in the sum values of all goods and services produced in an economy over a year. To increase this the government may undertake expansionary fiscal policy, by raising spending on...
NO
3191 Views

Explain one determinant of consumption:

Interest rates are one major determinant of household consumption. The level at which interest rates are set will affect consumer decisions on borrowing and saving, and therefore consumption. If interest rat...
SS
Answered by Samuel S. • Economics tutor
2602 Views