The substitutes available for a certain product help determine its Price Elasticity of Demand
The equation for calculating price elasticity of demand is: (%change of quatity demanded)/(%change in income)
Horizontal Integration: This is when one firm merges with or takes over another firm in the same industry at the same stage of production
The equation for calculating average cost is: total cost/cost per unit
Which of the following are examples of external economies of scale?
As businesses grow within an area, specialist skills begin to develop.
Better road and transport links develops as the area improve (e.g. London Docklands)
Low morale because of bigger size of company
In a specialized labor situation, which of the following is NOT true for workers?
They tend to have a simple but repetitive task.
The extensive practice has made them efficient and productive.
They switch between tasks daily.
A country has an absolute advantage over its trading partners if it is able to produce more of a good or service with the same amount of resources
An example of a tradeoff ( an exchange—giving up one thing to get something else) is a free lunch.
The law of diminishing marginal utility states that an individual gets more reward/satisfaction as they consume more and more units of a specific commodity.
Total expenditure is the same as total profit made by a business, regarding a specific market situation.
