Since this firm has the entire market for the particular latest fashion, then it is operating as a monopolist and are therefore, price makers or price setters (Mohr & Seymore, 2012s). For a monopolist, for profit maximization, MR = MC (Krugman & Wells, 2005). Therefore,
This saved consumers globally up to $60 billion. Many bio-fuels use food crops such as corn as inputs to the extraction and production of bio-fuels (Vidal n.d.). There has been a considerable rise in the demand for food crops such as corn. Such is because previously, almost all of the corn was consumed for food purposes but now the demand for bio-fuel has added to this demand resulting in an increase in higher overall demand for corn.
The demand curve plots the combination of both the quantity and the price of a commodity. A slight shift in the price, results in a shift along the demand curve price. A slight change in the price would certainly result to a shift of the demand curve. Technically speaking, a shift along the demand curve can be termed as a shift in the quantity demanded.
Since to sell more units of its product the firm has to lower its prices, the firm faces a downward sloping demand curve (Ison & Stuart, 2006). Since each additional unit sells only at a lower price, the marginal revenue curve lies below the average revenue curve or the demand curve.
Microeconomics is therefore the study of how firms, individual, and households allocate the resources at their disposal to satisfy their limitless and recurrent need. Since resources are limited, it is important for the consumers to rank their demands and wants in the order of preferences.
There are abundant signs which are pointing towards positive glimpses because there has been a little growth in the overall income of UK and the statistics are revealing that double dip depression is now being diminished from the UK’s economy(Alderman & Shelburne, 2011).
Therefore the author has termed Google as being operating as a monopoly in the search market. The author refers that Google has been dominantly playing its role in the search market and is this dominance is favored by governments as they are not placing any restrictions on the practices adopted by Google.
Short run equilibrium of a firm can be derived based on the total revenue and total cost and marginal revenue and marginal cost and marginal revenue and marginal cost. As firms are price-takers, each firm in an industry tries to maximize its profit by adjusting the output to a level where Marginal Cost (MC) =Marginal Revenue (MR).
The economic approach to consumer behavior delves into consumer demand analysis. The Theory of consumer demand is the analysis of demand with regard to consumer behavior and rationale when changes occur in variable factors such as price, income and
Individual consumer’s focuses on maximizing their utility subject to their budget line (MagrabI, 1991). On the other hand, producer’s aims at maximizing their profits subject to their production Isoquants (Mceachern,
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