Write a report that answers questions that explore economic analysis Term Paper

Write a report that answers questions that explore economic analysis and modern problems and the economic way of thinking - Term Paper congresswomanIt means the amount of maximum money one can charge for providing a result or service.The price, at which the demand of a product in the market equals its supply, is called an Equilibrium worth. Excess demand or excess supply makes Disequilibrium. By putting a Price Ceiling below the Equilibrium Price creates Disequilibrium which will make the demand in excess of supply as is shown in the graph below-When the government put price ceiling on Cable TV below the current equilibrium price, the demand for Cable TV will increase. During this time if a new service is introduced, which will follow cheaper to the operator, will be readily accepted due to excess demand. This action will lead not only to increase in sales exclusively also in revenues and wampum.Perfectly competitive market is the situation where all the factors except demand a nd supply that affect market price are equal. In this situation, demand of goods and services reduces with the increase in price and demand increases with the reduction in price. This is called Law of Demand as is shown in the graph below.When the demand for the product falls, the prices in the market will start to come down. In the short run, profits of the company will fall and in the long run the subject of firms will decrease due to reducing profits.When the demand for the product rises, the prices in the market will shoot up and go high. In the short run, profits of the company will increase and in the long run the number of firms will increase. New firms will be added to produce more products to meet the increase demand.Some long-run average cost curves are steeper on the downward side than others. This happens to the largest firms who tend to have cost advantage. It indicates that the industry is tending to bugger off a monopoly, and hence is called a natural monopoly. Natu ral monopolies tend to exist in industries with high capital costs in relation to variable costs, much(prenominal) as