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How does individual businesses affect the economy as a whole?
Hiutzilo
If businesses are small and the overall economy is large (in perfect competition), businesses only affect the overall economy in aggregate. Prices may change because overall demand rises and companies realize they can charge higher prices without losing customers, but no one company has any power over the economy.
As the size of companies increases and the number in a sector decreases, the power of an individual company begins to increase. First as a cartel, informally or formally, and then as a monopolist, companies can gain power to bar new entrants through aggressive pricing (e.g., Standard Oil), earn greater profits through supply restriction (OPEC), or secure more advantageous contracts on inputs (Wal-Mart.)
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∙ 16y ago
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The individual units that make up the whole of the economy.
What is the systemic crisis?
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Macroeconomics is the study of the economy as a whole instead of individual markets.
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Microeconomics focuses on?
The individual units that make up the whole of the economy.
What is the systemic crisis?
The systemic crisis refers to crisis at the whole system in which the economy tuns.when there is fall in one system or one sectorof economy like real economy it will affect the whole economy..
Macreconomics is the study of?
Macroeconomics is the study of the economy as a whole instead of individual markets.
What is the difference between macroeconomics amd microeconomics with respect to inflation?
MICROECONOMICS- this deals with any individual segment of economy. MACROECONOMICS- this deals with the whole economy.
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Is an area of economics that deals with the economy as a whole?
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