Day: January 15, 2022

This refers to the market structure dominates by large few firms. The number of sellers (firms) is small enough for other sellers to take account of each other i.e. if one seller changes his prices or uses non- price strategies… Read More

This is a form of imperfect competition which lies between the extremes of perfect competition and monopoly and includes elements from both markets. Examples include: restaurants, hair dressers etc Characteristics 1 There are many buyers and sellers in the market… Read More

Monopolies are usually associated with economies of scale because of the large size of the market controlled by the firm. Economies of scale imply lower unit’s costs of production. It is likely that the consumer will benefit from this cost… Read More

Perfect market is a market with many buyers and sellers where nobody can determine the price of goods or services. Characteristics Large number of buyer and sells where each individual firm supplies part of total quality supplied. Buyers are many… Read More

Mergers occur where two firms agree mutually to joint their operations together. While an acquisition occurs when a firm called a predator decides to take over another firm referred to as a prey either forcefully of willings. Mergers and acquisitions… Read More

In the long run, all the input into production processes are variable so the problems associated with diminishing returns to the variable factors do not arise. The law of diminishing returns therefore only applies to short run costs and not… Read More

This is the level of output at which total profit is at maximum. It is the best or the most efficient size of a firm when the long run average cost of a firm is at minimum. At this point… Read More

It helps in understanding the concept of cost. The following are necessary: Opportunity Cost Assuming full resources allocation and employment in production of good and services increasing the production of any one product involves the sacrifice of an alternation product.… Read More

In the long run all factors of production can be varied and thus the firm will chose the input combination which optimize output and at the same time minimize their cost. This is illustrated by the use isoquant and isocost.… Read More

This is a technical relationship between the output of good and the input required to make these goods. The function may take the form of an equation, a table or a graph. The relationship between an input and output is… Read More