Supply and Demand / Market structures
Not what you're looking for?
1) What are the advantages and limitations of supply and demand?
2) Analyze how organizations in each market structure (perfect competition, monopoly, monopolistic competition, and oligopoly) maximize profits.
Purchase this Solution
Solution Preview
1) Supply and demand models are often used to describe free markets. They provide us with an efficient, graphical means to explore how the "invisible hand" affects the market. However, the model requires that other things are held constant. In the real world, prices are governed by forces besides supply and demand. In addition, often supply and demand are interconnected and cause ripples and feedback effects throughout the economy. A complete analysis then requires a detailed understanding of the structure of the economy. Therefore, supply and demand analysis is best used for small parts of the economy, where the ripple effect will be minimized. If we attempt to apply what we learn from small scale analyses to the whole economy, we end up with conflicting results. The "paradox of thrift" is an example of how this could happen. Increasing saving by spending less is is generally good for individuals, since most of us have limited resources and need to save some of them for the future. But if everyone saves more, ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.