# Marginal Costs

Marginal cost is the rate of change of the total cost (ΔTC/ΔQ) and is dependent on the variable cost. This is because fixed cost is a constant and doesn’t affect the rate of change (remember, rate of change is effectively the differential of a function, in this case it would be the differential of the total cost Read more about Marginal Costs[…]

# Why Average Revenue is the same as the Demand Curve

In Unit 3 Business Economics we are told that D = AR, but why is this? AR is average revenue, and the calculation for average revenue is Total Revenue / Quantity. Total Revenue = Price * Quantity Therefore AR = Price * Quantity / Quantity => Price (as the Quantity is cancelled out) Hence AR Read more about Why Average Revenue is the same as the Demand Curve[…]

1. PED = %Change in QD / %Change in Price 2. The price elasticity of demand is the responsiveness (how they change their demand) of consumers to a change in the price of a good. 3. The good is inelastic 4. Perfectly Elastic = -Infinite; Perfectly Inelastic = 0; Unit Elastic = 1; A value Read more about Quiz Answers[…]

# Methods to spot Collusion

http://www.economist.com/news/finance-and-economics/21568364-how-antitrust-economists-are-getting-better-spotting-cartels-scam-busters The article above shows some different methods that anti-trust economists are now adopting in order to identify cartels. The main bulk of the article is based on the Benford Law which states that in a large number of populations the leading number is not uniformly correlated as one may expect. Instead the number 1 Read more about Methods to spot Collusion[…]

# Television Collusion

6 television firms were recently fined £1.2 Billion for colluding to fix prices of cathode rays in televisions. The result of this collusion was higher prices for consumers and thus larger profits for the television firms. The article can be read here. This shows the EU Competition Commission using its powers to prevent consumers losing Read more about Television Collusion[…]

# Why does the UK Government have such low interest rates on its debt?

Like the US the UK is facing low interest rates, despite having a high budget deficit and public debt. Why is this? The UK Government issues its debt in the form of Guilts, currently the interest rate the government has to pay on a year guilt is 0.32%. This is lower even than the base Read more about Why does the UK Government have such low interest rates on its debt?[…]

# Discuss whether a concentrated market is necessarily anti-competitive

Here is an essay we were set for class. As always feel free to leave any feedback below. A concentrated market (one in which there is a high value for the n-concentration ratio) is a market in which there are few firms which possess a relatively large market share. This fulfils one of the criterion of an Read more about Discuss whether a concentrated market is necessarily anti-competitive[…]

# Are large or small companies more successful?

This was a previous Interview Question for Oxbridge Economic Applicants. Here is a sample answer I came up with. To start with to answer this question it depends on how we are measuring size and successfulness. If we measure both in terms of profit then obviously a large firm (one which has larger profits) will Read more about Are large or small companies more successful?[…]