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Profit Maximization
Alexandrine Jones
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In a market economy what is the purpose of all firms?
Maximize profit
What are the characterstics of a pure market economy?
A pure market economy is an economy where all major economic decisions are made by individuals and private firms. Therefore some characteristics would include freedom of enterprise, and consumer sovereignty.
Why are all economies mixed?
Because by definition, true free market has no government control or regulation and true planned economy has no place for interaction between the firms when government regulation defines the economy. In all economy (except for maybe North Korea), both government and the market holds stake in the economic activities of the economy hence nearly all economies are mixed
Who owns all property and resources in a pure market economy?
in a pure one only private firms and individuals but in reallity both govt and private
In the circular flow of goods and services what does the resource market represent?
all the exchanges of goods and services in an economy
All of these are describing what market type of market structure?
Four types of markets are institutional, B2B, consumer, and reseller.
A Is the market supply curve for a product more or less price elastic than the supply curve of one of the firms in the market Why?
The market supply curve of a product is more price elastic than the supply curve of one of the firms in the market. The reason is that for any given price change, the market quantity response reflects the change in output of all the firms in the market.
What is a centrally run economy?
In a centrally-run economy, decisions about quantities and prices of goods and services to be provided are made by a small group, usually government bureaucrats. The opposite is a market economy, where such decisions are made - in theory - by private producers (sellers) and consumers (buyers). Neither type exists in its pure form.
What is the basis of a market economy?
Supply And Demand is the basis of most activity in a market economy.
What are the three aspects in free market economy?
The three aspects in free market economy are capitalism is a free market system of trade, governed exclusively on the economic principle of supply and demand. You need all of these to have a free market economy.
Going rate pricing?
All firms do have the power to fix a price ,but insteadof doing so,in a competitive market situation firms fix a price which is equal to the average price charged by all firms in an industry,ie,it collects all the prices firms with same product and compute the average.
In a market economy what is true about all trade?
voluntary
