Arm's-length price is the price agreed upon by two unrelated and independent parties in a transaction, free from any influence or duress. This concept is crucial for determining taxable liability in international trade and for establishing fair transfer pricing among subsidiaries of multinational companies.
An in-depth exploration of the Auctioneer Mechanism, explaining how prices adjust in a theoretical market to reach equilibrium without actual transactions.
A comprehensive examination of a balanced market where supply and demand are approximately equal, leading to stable prices and terms.
The Capital Asset Pricing Model (CAPM) is a financial theory that provides a formula to determine the expected return on an investment while taking into account its risk compared to the market as a whole.
The Classical Model is an economic theory which assumes that prices, wages, and interest rates are flexible and that markets will always reach equilibrium, resulting in full employment and output growth dependent on factor supply.
An economy in which all economic agents treat prices as given when making economic choices. This article delves into the historical context, key concepts, mathematical models, and significance of a competitive economy.
The concept of equilibrium quantity where the quantity supplied equals the quantity demanded, achieving market equilibrium. Learn about historical context, key events, detailed explanations, formulas, applicability, and more.
Understanding Excess Demand, its implications in economics, its causes, effects, and how it influences market dynamics.
A detailed exploration of the concept of excess demand, its implications in economics, and its impact on market equilibrium.
Understanding Excess Supply: Causes, Effects, and Economic Implications
Understanding Excess Supply and Excess Demand Situations Arising from Non-Equilibrium Prices
A comprehensive overview of flexible prices, their economic significance, historical context, key models, examples, and related terms.
An integrated state where supply and demand are balanced across multiple markets simultaneously, ensuring comprehensive market stability.
General equilibrium is an approach in economics for analyzing simultaneous equilibrium in all markets within an economy. This article delves into the historical context, key models, importance, applicability, and related concepts.
An analysis of how competitors in a market tend to minimize differentiation, positioning themselves closely to each other to maximize market share.
An in-depth exploration of inelastic demand, its implications, and significance in economics.
The Law of Demand is a core economic principle that outlines the inverse relationship between the price of a good and the quantity demanded by consumers.
Market Clearing is the process through which markets achieve a state of equilibrium by adjusting prices until the quantity supplied matches the quantity demanded. It ensures optimal allocation of resources.
An in-depth exploration of market equilibrium, where supply and demand are balanced at the prevailing price, including historical context, key events, models, importance, applicability, and related concepts.
The concept of a missing market refers to the nonexistence of a marketplace where a particular good or service can be traded. This can lead to market failure, as the equilibrium in a competitive economy may not be Pareto efficient.
A fundamental concept in financial mathematics ensuring that arbitrage opportunities are minimized in efficient markets.
An idealized market situation where all participants are price-takers with symmetrical information, ensuring a competitive equilibrium.
An in-depth exploration of price floors, minimum price levels imposed by the government above the market equilibrium, their effects, applications, and implications in various economic sectors.
Exploring the concept of private benefit, its role in economic decision-making, market equilibrium, and the difference between private and social benefits.
An in-depth examination of scarcity, its historical context, types, key events, and comprehensive explanations.
An in-depth exploration of the tâtonnement process, its definition, mechanics, historical context, and application in achieving market equilibrium.
A comprehensive exploration of the Triangle of Loss, its implications in markets, and related concepts.
Wage rigidity refers to the phenomenon where wage rates do not adjust to clear the labor market promptly, often due to factors like long-term contracts and collective bargaining. This article delves into its causes, effects, historical context, and significance in economics.
An in-depth exploration of Walras's Law, which states that the value of excess demand is zero, underpinning equilibrium in economic theory.
A Clearing Market is one where supply and demand reach equilibrium quickly, eliminating excess supply or demand at the market price.
An in-depth examination of market equilibrium, highlighting the state when market forces of supply and demand are balanced, resulting in stable prices and quantities.
Market Equilibrium occurs in a market where the prevailing price results in producers supplying exactly the quantity demanded by consumers at that price. A market in equilibrium will not experience changes in price or quantity produced.
An in-depth exploration of the concept of Monopoly Price, its determination, implications, and comparison with competitive market prices.
An in-depth exploration into the concept of Quantity Demanded, its determinants, and its place within economic theory.
Exploring the concept of allocational efficiency, its significance in the economy, essential conditions for its achievement, and real-world examples.
Comprehensive overview of demand schedule, including definition, practical examples, graphing techniques, and real-world applications.
A detailed examination of General Equilibrium Theory, its foundational principles, the role it plays in economic analysis, and an exploration of alternative frameworks.
A comprehensive guide to understanding Lindahl equilibrium, its defining conditions, real-world examples, and its implications in the provision and financing of public goods.
Comprehensive overview of oversupply, including its definition, underlying mechanisms, examples, and impact on markets and economies.
A comprehensive exploration of perfect competition, delving into its defining criteria, functioning mechanisms, real-world implications, and notable examples.
A comprehensive examination of Walras's Law, its historical origins, theoretical foundation, and implications for understanding supply and demand equilibrium across different markets.
