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In economic analysis, price doesn't shift the curve because the curve represents the relationship between two variables, such as quantity and demand, while price is a result of that relationship. Changes in price lead to movements along the curve, not shifts of the curve itself.
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Why does price not shift the curve in economic analysis?
Price does not shift the curve in economic analysis because the curve represents the relationship between quantity and price, and a change in price would cause movement along the curve rather than shifting it.
Can economic analysis provide a final answer to the question of whether the government should intervene in markets by imposing price ceiling and price floors?
Economic analysis cannot provide such an answer because it seeks to address positive questions such as "what is."
What is a demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
Leftward shift in the supply curve?
A leftward shift in the supply curve would mean that some outside (Macro-economic) or inside (Micro-economic) event occurred that caused the supplier of the good to not be willing to make as many at a lower price. The price of the good/service will increase. The new price will be at the new (higher) intersect of the supply and demand curves (equilibrium).
How is the shadow price calculated in the context of economic analysis?
The shadow price in economic analysis is calculated by determining the change in the objective function value when a constraint is relaxed by one unit. It represents the marginal value of relaxing a constraint and is used to measure the impact of constraints on the optimal solution.
Why does price not shift the curve in economic analysis?
Price does not shift the curve in economic analysis because the curve represents the relationship between quantity and price, and a change in price would cause movement along the curve rather than shifting it.
Can economic analysis provide a final answer to the question of whether the government should intervene in markets by imposing price ceiling and price floors?
Economic analysis cannot provide such an answer because it seeks to address positive questions such as "what is."
What is a demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
What is Demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
Leftward shift in the supply curve?
A leftward shift in the supply curve would mean that some outside (Macro-economic) or inside (Micro-economic) event occurred that caused the supplier of the good to not be willing to make as many at a lower price. The price of the good/service will increase. The new price will be at the new (higher) intersect of the supply and demand curves (equilibrium).
How is the shadow price calculated in the context of economic analysis?
The shadow price in economic analysis is calculated by determining the change in the objective function value when a constraint is relaxed by one unit. It represents the marginal value of relaxing a constraint and is used to measure the impact of constraints on the optimal solution.
What is different between Economic analysis and Financial analysis?
Economic analysis, in contrast to financial analysis, defines the real resource flows induced by an investment rather than the investment's monetary effects. (JP Gittinger 1982 Economic Analysis of Agricultural Projects) Financial analysis thus relates to the performance of a project from the viewpoint of a stakeholder - eg, a farmer or institution, and looks at investment, maintenance and operation costs and cash revenues after taxes, duties etc. Economic analysis defines the impact of the project on the regional or national economy. It does not consider transfers between economic actors, such as taxes, duties etc. It values traded outputs/costs at their economic level (often defined by their world price net of import or export costs). Non-traded outputs/costs (ie, where price is not determined by "the market") can be valued on the basis of "willingness to pay" or shadow price. Both economic and financial analysis should look at the with project situation compared to the without project (and not before and after) - ie, they take account of changes that would have occurred in the absence of the project investment.
Why monopoly has no suply curve?
Monopoly has no supply curve because the monopolist does not take price as given, but set both price and quantity from the demand curve.
What are the factors that will shift the demand curve?
All factors other than price will shift the demand curve. Price moves along the demand curve.
When can monopolist earn an economic profit?
A monopolist earns economic profit when the price charged is greater than their average total cost. To maximize profits, monopolies will produce at the output where marginal cost is equal to marginal revenue. To determine the price they will set, they choose the price on the demand curve that corresponds to this level of production.
What is the difference between project economic and financial analysis?
Economic analysis, in contrast to financial analysis, defines the real resource flows induced by an investment rather than the investment's monetary effects. (JP Gittinger 1982 Economic Analysis of Agricultural Projects) Financial analysis thus relates to the performance of a project from the viewpoint of a stakeholder - eg, a farmer or institution, and looks at investment, maintenance and operation costs and cash revenues after taxes, duties etc. Economic analysis defines the impact of the project on the regional or national economy. It does not consider transfers between economic actors, such as taxes, duties etc. It values traded outputs/costs at their economic level (often defined by their world price net of import or export costs). Non-traded outputs/costs (ie, where price is not determined by "the market") can be valued on the basis of "willingness to pay" or shadow price. Both economic and financial analysis should look at the with project situation compared to the without project (and not before and after) - ie, they take account of changes that would have occurred in the absence of the project investment.
Why is the demand curve not representative of price elasticity?
price elasticities are always negative hence brings ambiguities in the demand curve
