Top answers

Economics
A Level

List and explain some ways in which a monopolistic firm can use it's lower costs as a barrier to entry.

Monopolistic firms often experience Economies of Scale which makes their average total costs lower than competitors. This can create significant abnormal profit and can create barriers through:

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Answered by Reubin B. Economics tutor
2529 Views

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?

Oligopolies are interdependant as the success of their price strategy relies on the reaction of other oligopoly firms in the market. If an oligopoly decided to increase the price of it's output, they w...

Answered by Reubin B. Economics tutor
27245 Views

Explain how the diagram for a perfectly competitive firm demonstrates static efficiency.

Productive efficiency can be demonstrated by the firm's price relative to the Short Run Average Total Costs curve. By selling output at P1, (where MR=MC), it is selling at the minimum point ...

Answered by Reubin B. Economics tutor
3998 Views

Why might a perfectly competitive firm make abnormal profit in the short run but only normal profit in the long run?

In the short run there is a lack of firms in the industry as it is still new and firms have little incentive to enter it yet. This low supply of firms in the market means the market ruling price will b...

Answered by Reubin B. Economics tutor
21581 Views

What are the Macroeconomic Effects of Currency Fluctuations?

Currency and the Exchange rate can be a difficult topic to get your head around. I found a little cheat for remembering the different impacts of weaker or stronger currencies : SPICED which stands for ...

Answered by Georgia C. Economics tutor
3448 Views

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