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Explain the term price elasticity of demand

Price elasticity of demand is a measure of the responsiveness of the quantity of a good demanded to changes in its price. If the demand of a good is largely affected by a change in its price, demand for this...
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Answered by Angela R. • Economics tutor
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Define the term ‘externalities’

An externality is a positive or a negative effect experienced by a third-party to an economic transaction. In production for example, an externality would occur when there is a difference in the marginal pri...
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Answered by Edward E. • Economics tutor
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In a perfectly competitive labour market, explain how equilibrium wages are determined by the forces of supply and demand.

The labour market is a factor market, which is a market where the factors of production are traded. The supply of labour comes from the pool of economically active citizens who want to be employed. Labour de...
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Answered by Anish J. • Economics tutor
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How are is consumer and producer suplus shown on a diagram of supply and demand? How are both the division and amount of total surplus determined?

Starting with the curves themselves, we have a downward sloping demand curve as more people are willing to buy at lower prices. Conversely, seller will be willing to offer more goods for sale as the price in...
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Answered by Joshua L. • Economics tutor
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How are interest rates used by the Monetary Policy Committee to control inflation?

Inflation is the continuous increase in prices over time which can erode the value of money over time if left unchecked. This is the reason why the central bank has an interest in controlling inflation and k...
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Answered by Dana J. • Economics tutor
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