how markets work
- Created by: Sophie.ellenx
- Created on: 11-04-21 11:36
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- price determiation -the equalibrium point is where there are no more forces bring about chage - supply=demand
- excess demand - shortage in the market - charge higher and still sell goods - extension in supply
- excess supply - firms have unsold goods - prices fall and suppy contracts
- How markets work 2
- consumer and producer surplus
- consumer producer - the difference between the price the consumer is willing to pay and the price they actually pay
- producer surplus - difference between the price the supplier is willing to produce their prodct at and the price they actually produce at
- a decrease in deamd and supply - fall in consumer and producer surplus
- consumer producer - the difference between the price the consumer is willing to pay and the price they actually pay
- an indirect tax - tax on expenditure where the person who is charged isnt the person responsbible for paying the sum
- advalorem - tax payable increases in proportion to the value of the good eg VAT
- specific - an amount is added to the price - tax increases with the amount brought rather than the value of goods
- consumer and producer surplus
- excess demand - shortage in the market - charge higher and still sell goods - extension in supply
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