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Aggregate demand is the total demand for all goods and services in an economy; it is essentially gross domestic product. Its components are consumption, investment, government spending and net exports (ex...

This question tests the knowledge of students on indirect taxes, demerit goods, negative externalities and market failure. It is an example of a longer answer question, where students would be expected to...

First, is important to note that a firm that has a monopoly has the ability to set its own price since there is no other competitors in the market. In addition, in economics, we typically assume that all ...

Opportunity cost is the cost of sacrificing the next best alternative to the activity under consideration. In order to explain this I will use a literal example. You are going to watch a football match. T...

Generally a firm should shutdown if it's revenue is less than it's total cost. However in the short run since fixed costs (e.g. rent) have already been paid the firm only considers it's variable costs (e....