The demand of an individual consumer indicates the various quantities of a good (or service) the consumer is willing and able to buy at different possible prices during a particular time period, ceteris paribus (all factors remaining constant)According to the law of demand, there is a negative causal relationship between the priceof a good and ...

MC = marginal (extra) cost incurred by a firm when its production raises by one unit. MR = marginal (extra) revenue a firm receives from producing one extra unit ...

Good structure is essential for good economics essay marks.Following the BLT route is a good way to show clear understanding. BLT = Because Leads to, therefore and can show how you have gone from knowledge to understanding.For example, if the question was what happens to price if supply rises. The answer - if supply goes up price goes down.

This would therefore cause an increase in quantity of housing while reducing the price of housing. (4th mark analysis) However, the effect of the price decrease would depend on the current elasticity of demand in the housing market. (5th mark evaluation) This is all under the assumption that other factors in the housing market remain constant.

It is calculated through the formula AD=Consumer Spending (C)+ Investment (I)+ Government Spending (G)+ Exports (X) -Imports (M). Similarly, aggregate supply refers to the total supply of all goods and services produced within the economy at a specific time frame and price level, given the quality and quantity of the factors of production.

Competition is likely to have a big impact on Pizza Express especially if their main competitors have a cheaper price point this is because customers might be swayed by the more competitive price. For example, if Pizza Hut run special deals which make their pizzas cheaper customers may decide to go to their restaurant rather than Pizza Express.

Break-Even is a tool used by businesses to project the amount of units they have to sell before they break-even, in other words before they have recouped their investment. To calculate this number, 3 figures must be known. Firstly, the price at which the business is …

This leads to a degree of abnormal profit assuming which is the rectangle between price and cost.Draw the long run graph implying that in the long run firms have an opportunity to enter the market, given absence of barriers to entry and they are enticed in by the abnormal profits. This results in the existing firm’s demand curve shifting left.

Analysis: Overall, tax on inelastic product is an ineffective way to deter use of products that are deemed harmful. As consumers will continue to use the product regardless of price, deterring the use of these products is best done by changing user's perception of the product. for example, adverting the harms of smoking can have more impact ...

This is a possible essay question for a microeconomic exam. Let's first define what a tax is - an ad valorem tax is an indirect tax based on a percentage of the sales price of a good or service. We could also draw a diagram - an ad valorem tax will shift inwards supply, the lines will not be parallel as it is a percentage tax.