Quick Revision Quiz

-1 to 0

-Uncompetitive industries may lose jobs (unemployment) -Strategic industries (e.g. energy) should be domestically provided.

→ Identical Products (Homogeneous Products) → Low barriers to entry/exit. → Many sellers and buyers → Perfect knowledge

decreases

-Unemployed workers can't get new jobs because they don't have the qualifications and skills for the jobs that are available (Occupational Inflexibility). -Unemployed workers can't move around the country to seek the jobs that are available in different regions (Geographical Inflexibility).

Examples: -Limit pricing -Vertical integration -Switching costs -Exclusive contracts and licencing -Loyalty schemes

At low quantity of labour, as more workers are added the marginal product of labour increases. This is because of division of labour and teamwork.

elastic