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As I see it, if you don't have private companies, then the Government runs one big monopoly (basically) and there is no competition.
Therefore, when you privatize something, you allow anyone to create a company. This leads to many different people (private companies) creating the same thing, which creates competition, and therefore lowers prices (if your competitor can do the same thing, you will lower the price of your product so that people buy from your company instead of his). This also leads to bigger supply because most companies think that they'll sell more products than their competitor because they're forecasts are overoptimistic. Also the more they produce, the lower the marginal cost of their product (individual cost).
What else can I help you with?
If there is a decrease in the money supply that causes prices to fall and leads to deflation what happens to money?
It gains purchasing power.
How does volatility impact the value of options?
Volatility affects the value of options by increasing or decreasing their prices. Higher volatility generally leads to higher option prices, as there is a greater chance of the option reaching a profitable level. Conversely, lower volatility tends to decrease option prices, as there is less uncertainty and risk involved.
Which path-goal leadership style leads to greater satisfaction when tasks are ambiguous or stressful?
directive
What do monopolies tend to result in?
in most cases monopolies tend to result in higher prices and lower quantities of supply in the market, thereby destroying a little of what is known as consumer surplus. however in one case, the case of a natural monopoly, the presence of a monopoly leads to lower prices and higher quantity supplied because of the immense fixed cost required for the industry (examples are electricity).
What impact does the tailwind of a strong economy have on stock prices?
A strong economy typically leads to higher corporate profits, which can boost stock prices. This is because companies tend to perform better in a growing economy, attracting more investors and driving up stock prices.
Orcording to law if you have high supply with low demend you get lower prices?
When supply is greater than demand, consumers are at liberty to choose from their many options. This leads to sellers lowering their prices to remain competitive, and entice customers to choose them.
What are the benefit of privatization?
One of the benefits of privatization is that it improves service delivery. There is also improved efficiency and leads to more revenue generation.
What is a buyer's market?
A buyer's market is an excess of supply over demand, which leads to abnormally low prices.
What is buyers market?
A buyer's market is an excess of supply over demand, which leads to abnormally low prices.
What is the name of the fundamental law of capitalism based on the theory that abundance creates cheaper prices and scarcity leads to expensive prices?
Law of supply and demand.
Which is not an element of deflation?
the supply of goods and services leads to lower prices
If there is an increase in the money supply that causes money to lose its purchasing power and leads to inflation what happens to prices?
they rise
If there is a decrease in the money supply that causes prices to fall and leads to deflation what happens to money?
It gains purchasing power.
If there is an increase in the money supply that cause money to lose it purchasing power and leads to inflation what happens to prices?
they rise
How bond prices affected by money supply growth?
Bond prices are inversely related to interest rates, which are influenced by money supply growth. When the money supply increases, it typically leads to lower interest rates, making existing bonds with higher rates more attractive, thus driving up their prices. Conversely, if money supply growth leads to inflation concerns, it may prompt expectations of rising interest rates, which can decrease bond prices. Overall, the relationship hinges on the balance between supply, demand, and inflation expectations in the economy.
Why does reducing trade barriers promote increased international trade?
Free trade leads to lower prices and greater sales.
If there is an increase in the money supply that causes prices to rise and leads to inflation what happens to money?
If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.
