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In economics, deadweight loss is the loss of societal economic welfare due to production/consumption of a good at a quantity where marginal benefit (to society) does not equal marginal cost (to society) – in other words, there are either goods being produced despite the cost of doing so being larger than the benefit, or additional goods are not being produced despite the fact that the ...
In economics, the Laffer curve is a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. If the tax rates are too high, discouraging labor and investment, a reduction in tax rates may in fact lead to an increase in government tax revenues, because it will encourage the entities to work and ...
From an economic aspect, congestion is a negative externality, for drivers can affect other drivers' costs of travel, such as costs of time, miles, or gasoline. [28] Therefore, in 1920 A. C. Pigou published the first edition of The Economics of Welfare and tried to solve the congestion problem.
The decrease in supply creates an economic deadweight loss (DWL) and a decline in consumer surplus. [5] This is viewed as socially undesirable and has implications for welfare and resource allocation as larger firms with high markups negatively effect labour markets by providing lower wages. [5]
Managerial economics aims to provide the tools and techniques to make informed decisions to maximize the profits and minimize the losses of a firm. [4] Managerial economics has use in many different business applications, although the most common focus areas are related to the risk, pricing, production and capital decisions a manager makes. [31]
A common position in economics is that the costs in a cost-benefit analysis for any tax-funded project should be increased according to the marginal cost of funds, because that is close to the deadweight loss that will be experienced if the project is added to the budget, or to the deadweight loss removed if the project is removed from the budget.
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In economics, a government-granted monopoly (also called a "de jure monopoly" or "regulated monopoly") is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement.