Should I revise: a) labour markets b) all the business aspects of economics
Have 5 exams this week and literally no time to revise , also can someone help me out with government intervention vs leaving it to he market forces please
Should I revise: a) labour markets b) all the business aspects of economics
Have 5 exams this week and literally no time to revise , also can someone help me out with government intervention vs leaving it to he market forces please
im sure you know a couple policies that the government could implement to make a market more contestable ( tax, price max/price control, privatisation etc) and the argument for leaving it to the argument is simply that market forces will respond to the inefficiencies of a firm, if it isn't dynamic efficient then consumers might get bored of the same products and an evaluation of this is that if it is a necessity then consumers are forced to deal with it. another point for market forces is that of creative destruction which is that if a firm is not efficient then it means that it will eventually get run out of business by more efficient firms but this is in the long run.
how will taxing make the market more contestable? doesn't that make it harder for firm to enter????
taxing big firms specifically makes the market more contestable because if they tax the big firms the expected reaction would be to increase output and then produce at the socially optimum level of output which is where AR=MC
im sure you know a couple policies that the government could implement to make a market more contestable ( tax, price max/price control, privatisation etc) and the argument for leaving it to the argument is simply that market forces will respond to the inefficiencies of a firm, if it isn't dynamic efficient then consumers might get bored of the same products and an evaluation of this is that if it is a necessity then consumers are forced to deal with it. another point for market forces is that of creative destruction which is that if a firm is not efficient then it means that it will eventually get run out of business by more efficient firms but this is in the long run.
What do you mean by contestable, I thought that was to do with barriers to entry
you'll obviously spend more time on the 25 marker and 15 marker at the end with thinking and such. You should be fine with timing as long as you finish the context stuff quickly.