Deadweight Loss

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Deadweight loss is the fall in total surplus that results from a market distortion, such as a tax. In economics, a deadweight loss (also known as an excess burden or allocative inefficiency) is a loss of economic efficiency that can occur when equilibrium for … Continued

Business Combinations

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  A business combination will transform legally and economically independent companies into larger business entities. As a result, the economic and legal independence of individual companies can be lifted. But it is also a loose cooperation without loss of independence of individual companies conceivable. An … Continued

Supply Curve

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On the open market, goods and services are offered and demanded. On the supply side, depending on the type of good or service there are different providers. The supply quantity of these goods depends on the price, the corresponding graphical representation is … Continued

Demand Function

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In economics, the demand function represents consumer demand for a commodity as a function of price. The graphical representation is made on a coordinate axis (Y-axis is price / X-axis is quantity) which is known as demand curve. Definition / Explanation … Continued

Externalities

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When one speaks in the national economy of so-called externalities, one basically means economically oriented decisions of companies that unintentionally hit uninvolved market participants. The person causing the damage, ie the company here, does not compensate. The injured and uninvolved … Continued

Perfect Competition

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The principle of perfect competition is a theoretical idea in the economy, which in this form will probably not exist in the longer term. In order for the condition of perfect competition to be fulfilled, certain conditions must be fulfilled. … Continued

Absolute Advantage

posted in: Microeconomics | 2

Definition: what is absolute advantage? Roughly speaking the absolute advantage is about division of labor and specialization. The basic idea behind the absolute cost advantage is to find out where a particular product can be produced more cost-effectively than in … Continued