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How does privatization leads to lower prices and greater supply?
Wiki User
∙ 13y ago
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).
Wiki User
∙ 13y ago
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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.
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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).
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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.
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A buyer's market is an excess of supply over demand, which leads to abnormally low prices.
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 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.
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
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
Which is not an element of deflation?
the supply of goods and services leads to lower prices
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.
Why does reducing trade barriers promote increased international trade?
Free trade leads to lower prices and greater sales.
What 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.
If there 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.
