economist suggest that a market can fall if? (b) if the price of a good falls...

economist suggest that a market can fall if?

(b) if the price of a good falls by 10% and the percentage decrease in total amount consumer spend on the good is 5%, then the good is

(c) A firm that has a branded produced is

(d) an industry in which there are just a few large firms is lukely to be characterized by

(e) if the percentage change in price 10% and percentage in quantity supplied is 5% then the supply for the goods is

what would be tbe anwer for those question

Expert Solution

1) Economist suggest that a market can falling there is not a complete and symmetric information in the market to all parties related to the transactions. In other words market can fall or become inefficient when there is a asymmetric information in the market. Asymmetric information refers to the situation in which one party in the transaction has more information that other. In such a cases the market cease to work efficiently.

2) if the price of a good falls by 10% and the percentage decrease in total amount consumer spend on the good is 5%, then the good is inelastic. Inelastic goods has less degree(<1) of sensitivity to the change in price so that the quality of good doesn't increases in the same proportion as the fall in price.

3) A firm that has a branded produced is highly recognised firm in the market by consumers it has its own reputation and image regarding quality of product.

4) an industry in which there are just a few large firms is likely to be characterized by Oligopoly. In oligopoly there are only few large firms which has their respective market share and with or without product differentiation.

5) if the percentage change in price 10% and percentage in quantity supplied is 5% then the supply for the goods is inelastic and equal to less than one. Price Elasticity of supply is the percentage change in quantity supplied due to percentage change in price of the product.

Rahul Sunny answered 2 years ago

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