Market Structures and Economic Concepts: Competition, Monopoly, and More
Item 6: Perfect Competition Market
It is difficult to find markets in reality that perfectly align with the ideal of perfect competition.
Features:
- Many buyers and sellers in the market.
- Atomization of the market and concentration of homogenous products.
- There is perfect and transparent information.
- No brands.
- Free entry and exit of firms.
Note: Possible barriers to entry include high initial costs. The tendency is for production and profits to be zero.
Monopoly
A market where there is only one buyer (monopsony)
Read MoreUnderstanding the Welfare State: Successes and Failures
Welfare State: Successes, Failures, and Debates
What is the Welfare State?
The welfare state describes a system in which the state takes responsibility for protecting the health and welfare of its citizens and for meeting their social needs. The state does this through its provision of services and benefits.
Types of Welfare Provision
Welfare issues provoke much heated debate among sociologists, politicians, and the media because they involve important questions about how our society tackles inequality
Read MoreWorking Capital Policies and Credit Sales Strategies
Alternative Investment Policies of Working Capital
- Conservative Policy: This policy alternative has high liquidity, and a large proportion of its capital is in current assets. This type of policy is risk-averse.
- Moderate Policy: This policy manages capital in a rational way. Its growth is higher than that of a conservative policy and has sustained growth over time.
- Aggressive Policy: Companies that implement these policies have low liquidity because they believe that it is unnecessary to have too much
Understanding Credit Opening Agreements: Benefits and Obligations
1. The Opening Credits
The opening of credit through this agreement allows the bank to commit to making available to the client a sum of money as a partial ceiling. The customer can access and be reimbursed by withdrawing funds, applying interest on the amounts actually used. It’s an evolved form of a loan, offering more flexibility. It’s a common banking operation today. Its economic purpose differs from a loan, where the funding amount is set beforehand. The opening of credit is designed to better
Read MoreMacroeconomic Objectives: Achieving Full Employment and Price Stability
Macroeconomic Objectives: Balance and Changes
The set of macroeconomic objectives can be summarized in one: to achieve full employment with price stability and more efficient.
Factors Affecting the Economy
- Internal Market Forces: Changes in population, consumer behavior, investment, and technological innovation.
- External Perturbations: Events that happen around us and influence the government.
- Government Action: Directing and controlling the economy through fiscal and monetary policy.
Objectives of a
Read MoreUnderstanding Unemployment and Inflation: Key Concepts
Understanding Unemployment
Employed, unemployed, and inactive.
- Unemployment rate: Percentage of the active population that is unemployed.
- Participation rate: Percentage of the adult population that belongs to the workforce.
- Discouraged workers: People who would like to work but have given up searching.
Unemployment Rate
- Frictional Unemployment: Unemployment that occurs because workers take time to find the job that best matches their tastes and skills.
- Structural Unemployment: Unemployment due to the number