Profit Maximization

In economics it is often assumed that companies try to maximize profit. That is, they try to maximize revenue while at the same time minimizing costs. In order to do that, firms need to look “at the margin”. That means, they have to keep an eye on changes in revenue (i.e. marginal […]

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Monopoly Power

A Monopoly is one of the four typical market structures. It describes a situation where a single firm (or individual) is the sole producer and seller of a product or service in an entire market. It is characterized by a lack of competition. As a result, the monopolist has the ability […]

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The Law of Supply and Demand

The principle of supply and demand is one of the most important concepts in microeconomics. It helps us understand how and why transactions on markets take place and how prices are determined. To learn more about supply and demand we mainly need to look at consumers and producers. Consumers In this case, […]

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