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IB & A-Level Economics Market Equilibrium (Fully Animated Video) 🎯 1. Enhances Conceptual ClarityAnimations bring abstract concepts like supply and demand shifts or equilibrium price adjustments to life. Instead of static curves, learners see how changes ripple through the market in real time, making the learning experience more intuitive.🎨 2. Visual Engage...

*What is long run average cost?

Long run average cost is the cost per unit of output feasible when all factors of production are variable

*In the long run, all costs are assumed to be variable.

1. Economies of scale are the unit cost advantages from expanding the scale of production in the long run. The effect is to reduce average costs over a range of output.

2. These lower costs represent an improvement in productive efficiency and can give a business a competitive advantage in a market.

3.They can lead to lower prices for consumers and higher profits / dividends for shareholders.

4. As long as the long run average total cost curve (LRAC) is falling, then internal economies of scale are being exploited by a business

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PERFECTLY INELASTIC PRODUCTS

Perfectly inelastic products in real life are rare. If a product was perfectly inelastic, a supplier would be able to charge any price that they wanted to, and customers will still be willing to buy that product. The most common products that could be considered inelastic are food, medication, and to***co products. Perfectly inelastic products would be something like air or water, and no one can really restrict that at this point in time. The most common products that are inelastic would be food, prescription drugs, and to***co products.

Another product that could be considered close to perfectly inelastic would be gas. As mentioned above, if the price of gas changes, you will still need to travel to work and fill up your tank.

Having an inelastic product could determine the supply of the product. If the supplier knows that a 10% decrease in his price will increase, the sales with 15%. He might consider making that decision to be more profitable. If the supplier lowers the price by 10% and receives a 3% increase in sales, then he might not make the decision to reduce the cost.