there are many factors which affect product pricing in the UK, there are three which stand out among all others; firm’s objectives, market structure and pricing strategies. Market structure and a firm’s objectives are usually linked, for example a monopolist will normally profit maximise, whilst a perfectly competitive firm will be forced to sell goods at the market price. Despite these general assumptions, the product’s position in its life-cycle and the firm’s choice of strategy also have significant
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What are the conditions for a perfectly competitive market? A perfectly competitive market is a market in which economic forces operate unimpeded. For a market to be perfectly competitive, six conditions must be met: 1. Both buyers and sellers are price takers – a price taker is a firm or individual who takes the price determined by market supply and demand as given 2. The number of firms is large – any one firm’s output compared to the market output is imperceptible and what one firm does
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is the Market INTRODUCTION: We will talk about the market in general way, so we will define the meaning of the market and its structure. The term market refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product. The market definition begins with the total population and progressively narrows. So now we will describe the following terms: 1. Market definition
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tons per week to 60 tons per week when the price of peanuts increased from $4 per ton to $5 per ton. The price elasticity of supply for peanuts over this price range is (A) Elastic (B) Inelastic (C) unit elastic (D) perfectly elastic (E) perfectly inelastic 3. Which of the following best describes the law of demand? (A) The price of a good increases when the demand for the good increases. (B) The price of a good decreases when the supply of the good decreases.
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if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit? Why or why not? 2. Determine whether each of the following is an explicit cost or an implicit cost: a) Payments for labor purchased in the labor market b) A firm’suse of a warehouse that it owns and could rent to another firm c) The wages that owners could earn if they did not work for themselves 3. What are economies of scale? Please give an example. What are diseconomies of scale? Please
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CHAPTER 1 | Economics: Foundations and Models Chapter Summary and Learning Objectives 1.1 Three Key Economic Ideas (pages 4–8) Explain these three key economic ideas: People are rational; people respond to economic incentives; and optimal decisions are made at the margin. Economics is the study of the choices consumers, business managers, and government officials make to attain their goals, given their scarce resources. We must make choices because of scarcity, which means that although
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1. Use the following diagram to answer the next question. [pic] Refer to the diagram. Between the prices of $10 and $8, the price elasticity of demand is: A. 0.5 B. 0.9 C. 1.11 D. 2 2. A perfectly inelastic demand schedule: A. rises upward and to the right, but has a constant slope. B. can be represented by a line parallel to the vertical axis. C. cannot be shown on a two-dimensional graph. D. can be represented by a line parallel to the horizontal axis. 3. The price elasticity
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B. Consumers ability to substitute different goods The explanation for the law of demand involves: A. The markets ability to equate supply demand B. Consumers ability to substitute different goods C. The governments ability to set prices D.The suppliers ability to substitute inputs A. A normal good John estimates that with every 20% increase in income, the quantity of grapes purchased rises by 11.2%. From this information one would conclude that grapes are A. A normal good D. Not demanded
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Chapter 14 Firms in Competitive Markets MULTIPLE CHOICE 1. A firm has market power if it can a. maximize profits. b. minimize costs. c. influence the market price of the good it sells. d. hire as many workers as it needs at the prevailing wage rate. ANS: C PTS: 1 DIF: 1 REF: 14-0 NAT: Analytic LOC: Perfect competition TOP: Market power MSC: Definitional 2. A book store that has market power can a. influence the market price for the books it sells. b. minimize costs more efficiently
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Determination Topic Question numbers ___________________________________________________________________________________________________ 1. Real and nominal wage rates; trends 1-11 2. Purely competitive labor markets 12-46 3. Monopsony and imperfectly competitive labor markets 47-85 4. Union models and licensure 86-122 5. Minimum wage 123-130 6. Wage differentials; human capital 131-148 7. Pay and performance 149-162 Consider This 163-164 Last Word 165-167 True-False 168-184
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