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    (Original post by Nimrahk123)
    Does anyone have any ways to remember if demand is elastic or inelastic?
    if the answer is between 0 and 1, it is inelastic
    if the answer is more than 1, it is elastic

    for example if the change in quantity demanded/ change in price = 2, the good is elastic
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    (Original post by ameliawx)
    if the answer is between 0 and 1, it is inelastic
    if the answer is more than 1, it is elastic

    for example if the change in quantity demanded/ change in price = 2, the good is elastic
    Thanks, I think I finally understand
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    (Original post by theD0N)
    is that not just merit and demerit goods then?
    Market failures-
    Partial market failure- merit good and demerit goods. If left to market forces, firms will ignore externalities due to profit maximising and thus will ignore the externalities. This may lead to an under provision for merit goods and an over provision for demerit goods. Other reasons for partial market failures- Reduced income (merit only) and imperfect information.

    Complete market failures- public goods are the main reason for this- they are non excludable and non rivalrous as a result of this, there is an issue called the free rider problem- people gain the benefits without paying- this means that people will stop demand, firms will stop supplying in order to hold onto any profits and this will mean zero is supplied- missing market and complete market failure!
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    PLEASE can someone explain price floors and price ceilings?

    TIA X
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    (Original post by zwatkins66)
    And Information failure - where there is a lack of perfect information about the good or service for both parties involved

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    But isn't that government failure as well...
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    (Original post by ameliawx)
    PLEASE can someone explain price floors and price ceilings?

    TIA X
    Price floors are minimum prices that are set above the price equilibrium so that to make sure suppliers get a fair price on their goods.

    Price ceilings are maximum prices set below the market equilibrium to increase consumption of a merit good ie Education or Healthcare.
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    (Original post by ameliawx)
    PLEASE can someone explain price floors and price ceilings?

    TIA X
    I assume you are referring to minimum and maximum prices. A maximum price ( is set above the market equilibrium. It it the highest price a firm can legally charge- usually set on necessity goods e.g food,merit goods. The maximum price reduces price and increases the quantity sold and this can solve the market failure associated with the under provision of merit goods.

    A minimum price is set above the market equilibrium and will reduce the q sold and increase price often used for demerit goods e.g cigarettes. Can solve the market failure of over provision of demerit goods.
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    Dude, I'm pumped for tomorrow. Please, let there be no questions on Speed cameras or something silly.
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    (Original post by Shafy97)
    But isn't that government failure as well...
    Government failure based on information is called 'inadequate information' Basically they don't have full knowledge of what they are doing.. rather than information failure which is a form of market failure that is when a firm is witholding information from a consumer to sell the good/service basically (I think). Sorry probably doesn't make any sense...

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    yh
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    Looking for very sophisticated evaluation or analysis????
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    I'm doing AQA and I'm trying to be optimistic about it. The thing is, I was encouraged to take a 4th subject so I took Economics and it is clearly my weak subject. I'm pretty secure with Microeconomics but I generally don't know anything about Macroeconomics, so that will be fun (Also doesn't help that I have another exam immediately afterwards)

    Can someone tell me what a missing market because I don't remember covering it?
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    I havent even started revising
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    Complete market failure so no market exists
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    (Original post by Kenzar234)
    Dude, I'm pumped for tomorrow. Please, let there be no questions on Speed cameras or something silly.
    Just wondering what sort of question that would be like, like what would they ask
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    (Original post by IKEAPanda37)
    I'm doing AQA and I'm trying to be optimistic about it. The thing is, I was encouraged to take a 4th subject so I took Economics and it is clearly my weak subject. I'm pretty secure with Microeconomics but I generally don't know anything about Macroeconomics, so that will be fun (Also doesn't help that I have another exam immediately afterwards)

    Can someone tell me what a missing market because I don't remember covering it?


    there are two types of market failure complete and partial
    a partial market failure is when say a firm produces 100 of a product but there is demand for 200 of that product

    whereas a complete market failure is where there is demand for a good or service but it isnt in existence, this usually occurs for goods which have the problem of the free rider ie you cant stop someone using it without paying for it such as street lighting, or national defence, thus usually when there is a missing market you will find that it becomes government provided
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    (Original post by cathartic)
    hey how prepared do you guys feel for economics tomorrow?
    I still need to go over market failure and government intervention.
    Also what topics do you guys predict? I think market failure and the topic on production/economies of scale
    I still havent revised loooooooooooool kill me
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    (Original post by elllbabe)
    there are two types of market failure complete and partial
    a partial market failure is when say a firm produces 100 of a product but there is demand for 200 of that product

    whereas a complete market failure is where there is demand for a good or service but it isnt in existence, this usually occurs for goods which have the problem of the free rider ie you cant stop someone using it without paying for it such as street lighting, or national defence, thus usually when there is a missing market you will find that it becomes government provided
    Thank you, that makes much more sense now
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    Guys how do you explain adverse selection and moral hazards?
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    (Original post by grfsbsv)
    Looking for very sophisticated evaluation or analysis????
    What?

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