Nobody downloaded yet

Economics - Essay Example

Comments (0) Cite this document
Summary
The market model of supply-demand determines the price and quantity of a commodity, pertaining to the specific behavior of two market agents: The consumer and the producer. Consumers purchase according to their willingness and ability to buy a commodity, and the producer owns…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.3% of users find it useful
Economics
Read TextPreview

Extract of sample
"Economics"

Download file to see previous pages At this specific combination of price and quantity, both the agents are maximizing their self interests, keeping in mind the other agent’s behavior and satisfying the condition of Pareto-Optimality (Google Docs, page 57-58).
A competitive market is identified by three main characteristics: many consumers and many sellers, freedom of choice under the umbrella of perfect information, and the assumption that the agents have a rational behavior in determining their choice, which essentially maximizes their self-interests. To ensure optimality of outcome, the existence of externalities is unacceptable (Howard, 1994, page 384)
The market model of a competitive market is thus based on the general assumption that industries seek to maximize their profits, and therefore are competitive. However, given the condition that a single firm is just one part of the many firms in the market, it is projected that it cannot affect the price of the commodity which in this case is ‘the rainwater tanks’. Hence an individual seller is just a price taker, it can be rightly said that it faces a flat demand curve (John and Akila, 2009, page 246)
Referring to the diagram (perfect competition) below, the Supply Curve (Ms) interacts with the Demand Curve (Md) in the Industry model, to determine the equilibrium price which is P1, that will become the demand curve of an individual firm i.e. the flat line AR=MC in the Individual Firm model. The quantity supplied by the individual firm is Q1, and the quantity supplied by the overall industry would be the amount on the x-axis (Industry Output), corresponding to P1.
The shaded area denoting the profit of any individual firm is an assumption based on the consideration that the supplier has an average cost below the price; However, depending upon every individual firm’s own capacity to supply rainwater tanks and the respective average costs they face, they shall determine their supply curve, and all the individual ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Economics Essay Example | Topics and Well Written Essays - 1500 words - 29”, n.d.)
Economics Essay Example | Topics and Well Written Essays - 1500 words - 29. Retrieved from https://studentshare.org/miscellaneous/1564693-economics
(Economics Essay Example | Topics and Well Written Essays - 1500 Words - 29)
Economics Essay Example | Topics and Well Written Essays - 1500 Words - 29. https://studentshare.org/miscellaneous/1564693-economics.
“Economics Essay Example | Topics and Well Written Essays - 1500 Words - 29”, n.d. https://studentshare.org/miscellaneous/1564693-economics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Economics
...?Economics Introduction While many people think about economics as the study of money or purchasing, in reality the field of economics is much larger. Through a number of principles that have been developed over a number of years economics has come to investigate many of the phenomenon of the world. For instance, Adam Smith’s theory of the invisible hand argues that when people engage in business and selling they are governed by the invisible hand of the market that helps regulate prices and ensures that businesses and people act in certain ways. Indeed, the nature of economics is like psychology in that it presents theories of human behavior. One of the unique things I have witnessed is the nature of people who buy collectible... such as...
3 Pages(750 words)Essay
Economics
...? ECONOMICS ANALYSIS Introduction Various economists define economics in different ways though generally economics refers to the study on the allocation of the limited resources towards the production, supply, and demand of specific products. As such, economic analysis relates to the study of economic systems in an industry to ascertain the effectiveness of the operations of a given industry with reference to its profitability1. With this, we are able to establish the optimum use of the limited resources to achieve a given economic objective. In doing, economic analysis equally considers the assumptions and constraints in...
6 Pages(1500 words)Essay
Economics
...?Economics Table of contents Analysis of Japanese Tourist Demand to Guam 3 Case study of China and Tourism Development 6 References 9 Bibliography 9 Analysis of Japanese Tourist Demand to Guam 1. The key determinants influencing demand of Japanese tourists in Guam have been assessed in the referred case study. Firstly and most importantly, it is their income level which matters the most behind their decision to tour. It had been found that the frequency of Japanese tourists in Guam rise as the economy of Japan pass through a boom, while their behaviour about turns during recessionary phases. The second most important factor is the fairness in prices. Though the Japanese tourists tend not to be too sensitive to price...
6 Pages(1500 words)Essay
Economics
...? 22 March Summary of the article: People all over the world have, for long, remained under the influence of American culture because America has traditionally managed to become and remain rich. Economists Brad DeLong and Stephen Cohen have expressed in their book, The End of Influence that as other nations are rapidly gaining economic power, people will soon experience a major change in life style. People have conventionally tried to associate themselves with America in terms of culture and life style because Americans, being rich, have been idealized. In the recent years, the free-market capitalism has put American economical stability into crisis and has transferred the power to the economy of emerging...
2 Pages(500 words)Essay
Economics
.... People are getting more dismissive on the fact that they are beneficiaries or that they are bound to be one. What’s bothersome is that this has become matter-of-factly to some people. This attitude must be suppressed. Attitude is the most important aspect to be established. The amount of $1,500 for each household is no longer applicable to the vicarious benefit that the government seeks to carry out, it is already bordering on lecherous. Bibliography Baumol, William J. and Alan S. Blinder. Economics: Principles and Policy. Australia: Thomson Learning, Inc. , 2000. Leonhardt, David. Men, Unemployment and Disability. 8 April 2011. 12 April 2011 . Rich, Motoko. Moving From Disability Benefits to Jobs. 7 April 2011. 12 April 2011 .... Motoko...
3 Pages(750 words)Research Paper
ECONOMICS
...?Economics A. Definitions of Terms: Elasti of Demand Demand Elasti is the elasti or volatility of a certain good or service’s quantity demanded value when certain factors of the demand are altered. The most common of these factors is the Price Elasticity of Demand, wherein it measures the volatility of the product’s demand by the consumers should it be subjected to price changes, whether an increase or decrease in price. If the quantity demanded of a certain product changes minimally or does not change at all, then that product is said to be a Price Inelastic Good. Consequently, if a product whose price increased and such a change brought forth an abrupt drop in quantity demanded of the same product, the good is said to...
2 Pages(500 words)Essay
Economics
...author from the Wall Street Journal wrote, “In its statement, Egypt's Central Bank said deteriorating regional political circumstances, including a civil war in Libya as well as violence in Syria, Yemen and Bahrain, could drive up oil prices and further slow the continuing global economic recovery.” (Bradley) The Bahrain Economic Development board is positive in the most recent release, “In Q4 2010, the Bahrain economy is expected to post similar growth to that seen in the third quarter growth…over 4%” (Bahrain Economic Quarterly p. 4). Overall there is growth occurring especially in the tourism section as oil only accounts for approximately 15% of the economic outlook....
2 Pages(500 words)Essay
Economics
...?Introduction United s of America is considered a super power of the world. It was once considered an economic model to be followed as it applied the system of laissez faire. With rapidly booming technology in the 1990s, the American economy surpassed greatly. The US economy today is in a great turmoil. However, today USA is going through the worst recessionary period of all times. After the Great Depression of 1930s, this recession has had the worst impact on the economy of USA. Although, the government is carrying out various fiscal stimulus and measures to disentangle itself from this recessionary phase but up till now it has not been able to do so. As a result, the Current Account Balance of has been continuously...
2 Pages(500 words)Research Paper
Economics
...? Economics Introduction Bateman and Chang make arguments in close relation to their journal, Microfinance and the Illusion of Development, that microfinance in most instances makes things unbearable if not much more worse. Therefore, this is an exclusive report that applies the evidences found within the article so as to prop up these claims. The microfinance model does not pay attention to the crucial roles dictated by scale economies. By definition, microfinance results in micro-enterprises and this means that agricultural units and enterprises that are small in size often operate under efficient and effective scales. It is imperative to consider ventures that operate under the minimum dictated scales are not fit to...
3 Pages(750 words)Essay
ECONOMICS
...? Due: ECONOMICS ESSAY CHAPTER 3 a) The price of coffee in Cote d’Ivoire 30*5000=166.6667 CFA francs per Pound.(b) The relative price of coffee in Cote d’Ivoire versus Vietnam Relative prices. Cote d’Ivoire/ Vietnam 160/5000=0.032 Vietnam/Cote d’Ivoire 5000/160=31.25 Coffee traders will buy prefer buying coffee in Cote d’Ivoire due to the low relative price and sell in Vietnam due to the high relative price. The price of coffee in Cote d’Ivoire will tend to be high locally while in Vietnam, the prices will be low as much will be imported. 2. (a) The law of one price will hold in the case of rice traded freely in U.S and Canada. For the law of one price to hold, the market should be free from any trade barrier. The...
4 Pages(1000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Economics for FREE!
Contact Us