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What are economies of scale?

Economies of scale describe the positive effects of increasing production to a firm. The principle is that as output increases, it could be the output of shirts, for example, then the average cost per shirt ...
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Answered by Matthew H. • Economics tutor
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Can you explain the difference between RPI and CPI inflation?

Retail Price Index and Consumer Price Index are both indices that seek to measure the current level of inflation, that is the general rise in price levels across goods over the year. CPI is calculated using ...
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Answered by Matthew H. • Economics tutor
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What is the effect of a rise in Interest rate on the level of growth in the economy?

A rise in Interest rates provides an incentive to save money rather than spend, reducing investments and consumption. As a result economic growth is likely to decreaseThe value of the pound will increase as ...
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Answered by Ben H. • Economics tutor
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Explain how price and output are determined for a firm in a monopolistically competitive market, in both the short run and the long run

There is a v simple formula for answering these 'explain' questionsStart with definitions - what is monopolistic competition? -10% of marksThen to score full marks, you must include:2 well-reasoned chains of...
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Answered by Will H. • Economics tutor
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What is a possible result of a reduction in the budget deficit on the circular flow of income?

Define Budget Deficit and Circular flow of income 2) Results = A reduction in the budget deficit leads to a reduction in net injections(government spending is an injection). Therefore a reduction in the budg...
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Answered by Adriana A. • Economics tutor
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