ENG ECON 4
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Questions and Answers

“ meralco and Maynilad”– (One Seller and Many Buyers) - exist when a unique product or services is available from a single vendor and that the vendor can prevent the entry of all others into the market.

o Monopoly

“gas stations and teleservices”– (Few Sellers and Many Buyers / Sellers either compete or collaborate with each other.) exist when there are so few suppliers of a product or service that action by one will almost inevitably result in similar action by the others.

o Oligopoly

“nescafe and soft drinks”– (Sellers are the price settlers and Many Sellers and Many Buyers) - a large number of sellers and buyers. They do not sell identical products but are slightly similar.

o Monopolistic Competition

return of the capital or cost of using capital.

<p>INTEREST-</p> Signup and view all the answers

calculated using the principal only, ignoring any interest that had been gotten from preceding periods.

<p>SIMPLE INTEREST-</p> Signup and view all the answers

1 month-30 days 1 year- 360 days (banker’s year)

<p>Ordinary Simple Interest-</p> Signup and view all the answers

1 year- 365 days 1 leap year= 366 days

<p>Exact Simple Interest-</p> Signup and view all the answers

  • interest of an interest period is calculated on the principal plus total amount of interest accumulated in the previous period. “the interest on top of interest”

<p>COMPOUND INTEREST</p> Signup and view all the answers

cost of borrowing money

<p>• rate of interest(r)-</p> Signup and view all the answers

-specifies the rate of interest and a number of interest periods in one year.

<p>nominal rate of interest (r)</p> Signup and view all the answers

Study Notes

Market Structure

  • A market structure with one seller and many buyers exists when a unique product or service is available from a single vendor, and the vendor can prevent the entry of others into the market. (Example: Meralco and Maynilad)
  • A market structure with few sellers and many buyers exists when there are only a few suppliers of a product or service, and action by one supplier will likely result in similar action by the others. (Example: Gas stations and teleservices)

Product Differentiation

  • A market structure with many sellers and many buyers exists when there are a large number of sellers and buyers, and they do not sell identical products, but rather slightly similar products. (Example: Nescafe and soft drinks)

Time and Interest Calculations

  • 1 month is equivalent to 30 days
  • 1 year is equivalent to 360 days (banker's year) or 365 days (normal year), and 366 days in a leap year
  • Interest on top of interest, also known as compound interest, is calculated on the principal plus the total amount of interest accumulated in the previous period

Cost of Borrowing Money

  • The cost of borrowing money is specified by the rate of interest and the number of interest periods in one year

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Description

Learn about the concept of a monopoly market structure using the case of Meralco and Maynilad where a single vendor controls the supply of a unique product or service, with no other competitors in the market.

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