Functions of The Price Mechanism The price mechanism is the interaction of demand and supply in a free market This interaction determines prices which are the means by which scarce resources are al...
Price Determination & Equilibrium Price Determination In a free market economy, prices are determined by the interaction of demand and supply in a market A market is any place that brings buyer...
Price Elasticity of Supply (PES) The law of supply states that when there is an increase in price (ceteris paribus), producers will increase the quantity supplied and vice versa Economists are inte...
Supply Supply is the amount of a good/service that a producer is willing and able to supply at a given price in a given time period A supply curve is a graphical representation of the price and qua...
Price Elasticity of Demand (PED) The law of demand states that when there is an increase in price, there will be a fall in quantity demanded Economists are interested by how much the quantity deman...
Demand Demand is the amount of a good/service that a consumer is willing and able to purchase at a given price in a given time period If a consumer is willing to purchase a good, but cannot afford ...
Rational Decision Making When analysing markets, a range of assumptions are made about the rationality of economic agents involved in the transactions In classical economic theory, the word ...
Free Market, Mixed & Command Economies In order to solve the basic economic problem of scarcity, economic systems emerge or are created by different economic agents within the economy Th...
Specialisation & The Division of Labour Scotsman Adam Smith is often referred to as the 'father of Economics' He published 'The Wealth of Nations' in March 1776 and explained many fundam...
