Free Rider Problem

The Free Rider Problem occurs when there is a good (likely to be a public good) that everyone enjoys the benefits of without having to pay for the good. The free rider problem leads to under-provision of a good or service and thus causes a market failure. The problem occurs because of the failure of individuals to reveal their real or true…
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Determinants of Demand

17 The determinants of demand are factors that cause fluctuations in the economic demand for a product or a service. A shift in the demand curve occurs when the curve moves from D to D₁, which can lead to a change in the quantity demanded and the price. There are six determinants of demand. These six factors are not the same as a movement along…
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Deflation

Deflation is defined as the decrease in the average price level of goods and services. It means a general decrease in consumer prices and assets, but the increase in the value of money. If the inflation rate is negative, i.e. below 0%, then the economy is experiencing deflation. Deflation usually occurs during a deep recession, when there is a…
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Top 100 Economics Blogs of 2018

After the overwhelming success of our 2016 and 2017 Top Economics Blogs lists, we’ve decided to release a brand new list for 2018. The 2018 list highlights many newcomers and covers a wide range of economic topics. Blogs are included in categories ranging from general economics to specific topics such as finance, healthcare economics, and…
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Income Elasticity of Demand (YED)

Income Elasticity of Demand (YED) is defined as the responsiveness of demand when a consumer's income changes. It is defined as the ratio of the change in quantity demand over the change in income. The higher the income elasticity, the more sensitive demand for a good is to changes in income. This means that a very high-income elasticity of…
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Consumer Sovereignty

Consumer sovereignty is the theory that consumer preferences determine the production of goods and services. This means consumers can use their spending power as 'votes' for goods. In return, producers will respond to those preferences and produce those goods. In reality, however, producers do produce goods that consumers do not want or…
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