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Hi, I have an essay due tomorrow so please please reply as soon as possible!

My essay question is: ''why should the government be concerned about economic inequality, apart from poverty?''

I have so far written 800 words but I'm not finished. Any ideas would be useful!

Could look at the knock on effect of economic poverty, increase crime for example, or anti social behaviour. Other effect could be the likelihood of these people taking alcohol/drugs etc especially in poverty stricken areas where it is more likely. Another area could be lower paid families have historically had less advantaged children so the effect it could have on future generation education and lead to a less skilled economy.

I have a question for my essay and I have no idea what points to include or how to even structure/write the essay.

The question is: "Evaluate the extent to which the price of food is likely to rise by more than the price of air travel in the future" - 25 marks.

Any help would be very much appreciated

I have a question for my essay and I have no idea what points to include or how to even structure/write the essay.

The question is: "Evaluate the extent to which the price of food is likely to rise by more than the price of air travel in the future" - 25 marks.

Any help would be very much appreciated

For a natural monopoly the long-run average cost curve (LRAC) falls continuously over a large range of output. The result may be that there is only room in a market for one firm to fully exploit the economies of scale that are available.

I don't understand why does this mean that there is only one firm to exploit the EoS?

Also, LRAC is falling because long run marginal cost is below LRAC. There may be room only for one supplier to reach the minimum efficient scale and achieve productive efficiency.

I don't understand the paragraph above either, why is marginal cost less than average cost

how does his mean only one supplier can reach the productively efficient point on the LRAC curve?

It's not so much that there is only one firm which can exploit economies of scale but the economies of scale mean that the industry can support only one firm.

A firm operating at high levels of output have an incredibly low average cost. They can produce goods at a lower cost and therefore supply them at a a lower cost. Smaller firms simply cannot compete and drop out of the market, leaving one firm left.



If average cost falls that means marginal cost is less than the average.

For example:

Imagine 5 test papers, each with a mark of 10. The average mark of all five papers is 10.

If you add another paper to the set that has a mark of 8 then the average falls to 9.6




It doesn't. MC below AC just describes economies of scale. And this is just your first question.

Thank you so much, I understand it now ! So does that mean the last line is incorrect ?

MC below AC does not mean that there is a natural monopoly. Every firm has MC below AC at some point (see your normal cost curves) but natural monopolies have falling AC at levels of output far beyond normal firms.

Hi guys, in limit and predatory pricing - do the established and larger firms reduce the price of a good just above and below their average cost or the new firms (smaller firms) average cost?


Posted from TSR Mobile

Avoiding wasteful duplication
The best way to ensure competition, without the need to duplicate the infrastructure, is to allow new train operators to use the existing track; hence, competition has been introduced, without duplication of costs. This is called opening-up the infrastructure.

This approach is frequently adopted to deal with the problem of privatising natural monopolies and encouraging more competition, such as:

Telecoms, the network is provided by BT

Gas, the network is provided by National Grid (previously Transco)

Can someone please explain how the two examples adopt this method ?


Posted from TSR Mobile

Both Bt and National Gas were originally nationalised. This means that they were state funded monopolies and therefore were funded by the government and the infrastructure was set up to help the residents of the country.
Over time this mean that the government helped to fund railway lines, telephone cables or even gas exploration sites. Now, they want to privatise these companies so they are now owned by shareholders not government and this will introduce competition as they will now compete with other private companies to tender for business.
However, all the infrastructure built over the years still exists and if this could not be used, not used for anything else atm, companies will have to spend money building infrastructure. this is costly and so many companies may not enter the market otherwise, which could again then create a monopoly which is what the government is trying to avoid. So the open infrastructure is better.