What is Elasticity? - Elasticity refers to the degree of responsiveness in supply or demand in relation to changes in price. If a curve is more elastic‚ then small changes in price will cause large changes in quantity consumed. If a curve is less elastic‚ then it will take large changes in price to effect a change in quantity consumed. Graphically‚ elasticity can be represented by the appearance of the supply or demand curve. A more elastic curve will be horizontal‚ and a less elastic curve will
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THE UTILITY CONCEPT THE term utility refers to satisfaction a consumer gets from whatever goods and services he consumes. It will be useful to discuss between two utility concepts: (i) total utility (ii) marginal utility Total utility attained from a commodity refers to the sum total of satisfaction which a consumer receives by consuming the various units of the commodity. The more units he consumes‚ the greater will be his total satisfaction upto a certain point. As he keeps on
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Internal economies of scale -- Savings in cost as firm expands. Created by firms’ own policies and actions. All must link back to lowering AC 1. Technical Economies of scale (Technical and engineering factors) • Factor indivisibility Economies • Make full use of large equipments • Economies arising from increased dimensions • Larger dimensions. Container principle>>Doubling of area more than doubles the volume • linked process economies • Takes a product through several stages of production‚ saves
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ExxonMobil Corp.: A Case Study Christina Goris ECO 201 – Microeconomics Dr Greg Randolph June 13‚ 2014 Abstract The purpose of this paper is to outline the company profile for Exxon Mobil; its business stance‚ policies‚ sustainability‚ economic responsibility and profitability. It will examine such factors as supply‚ demand‚ competitive advantages‚ market structure‚ and entry barriers. The oil and gas industry as a whole will referenced with the purpose of giving a better context to the
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Barriers to entry: In theories of competition in economics‚ barriers to entry are the obstacles and hindrances that make it difficult for a company to enter a given market or industry. The most common barriers to entry include government regulation and economies of scale‚ but nowadays it is increasing for entry barriers to be viewed as a cost. Stigler defined barriers to entry as “A cost of producing which must be borne by a firm which seeks to enter an industry but is not borne by firms already
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Exam practice: paper 1 (SL and HL) Introduction to paper 1 Paper 1 has the same structure for both standard and higher levels. Paper 1: SL and HL Duration of paper 1 Focus and structure of paper 1 1 hour and 30 minutes Section A focuses on section 1 of the syllabus (microeconomics). Students must answer one question from a choice of two. Section B focuses on section 2 of the syllabus (macroeconomics). Students must answer one question from a choice of two. Structure of questions and marks earned
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The Prize: The Power Play for Oil The world has been forcibly changed by the discovery‚ invention or innovation of various things throughout history‚ as food items‚ weapons and even techniques have shaped world history. However‚ oil stands as perhaps the premier thing to ever shape history‚ as oil has remained a mainstay within the global power struggle for centuries. Daniel Yergin acknowledges the power and possibility made available by oil in his renowned book The Prize‚ where he explains
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BSB & Sky TV slide1: News Corporation would begin broadcasting a satellite TV service to Britain in February 1989. BSB had been working toward the same goal for eighteen months and planning a fall 1989 launch date. Both were (losing Money‚ Gaining Profit). Please Choose One.Why would a frim engage itself in price war? BSB and SKY were both losing money in the price war.Price is a commercial method to beat down competitors in the same industry.One competitor will lower its price first and others
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Chapter Six Businesses and Their Costs Study Questions: 1. Explain the difference between a plant‚ a firm‚ and an industry. Plant – establishments such as a factory‚ farm‚ mine or store. Firm – an organization that employs resources to produce goods/services for profit. Industry – group of firms that produce the same or similar products. 2. State the advantages and disadvantages of the corporate form of business. Advantages – most effective form of
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Economics Unit 8 Unit 8 Nature of markets and Pricing of Products I Structure 8.1 Introduction Objectives 8.2 Meaning of market and market structure 8.3 Kinds of markets 8.4 Perfect competition 8.5 Monopoly 8.6 Monopolistic competition 8.7 Oligopoly 8.8 Duopoly 8.9 Bilateral monopoly 8.10 Monopsony 8.11 Duopsony 8.12 Oligopsony 8.13 Industry analysis 8.14 Summary 8.15 Terminal Questions 8.16 Answer 8.1 Introduction Efficiency of management lies in its capacity to analyze the market. Study
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