What is Socialism?

Pros and Cons of Socialism

Socialism Definition Socialism is a system that is based on public or collective ownership of means of production and distribution of goods. Ownership of such means might lie in the hands on a government, elected through democratic means or with a cooperative body. As a result, there is no private ownership. Socialists believe that shared … Read more

What are Public Goods?

Public Goods Free Rider Probelm

Public Goods Definition Public goods, as the name suggests are available to the entire public, within a society. These goods might be available in nature like sunlight or might be provided by the government through collective taxation like defense services. For a commodity to be classified as public good, it must have two characteristics: Non-Excludability … Read more

What is a Cartel?


Cartel Definition Cartel is a collusion between different producers. These producers could be individual firms or even countries. The producers enter into a cartel in order to control the price and quantity supplied of their product. This helps them get higher profits for their products and to cut competition. In consultation with each other, members of … Read more

What is Perfect Competition?

Perfect Competition

Perfect Competition Meaning It is a market structure in which there are numerous sellers, selling a product that is largely the same. Having said this, it is important to note that perfect competition is a market construct or a theoretical concept, the existence of which in real life rarely exists. But this helps in understanding … Read more

What is Hyperinflation?


Hyperinflation Meaning Hyperinflation is a rapid and uncontrollable rise in prices of goods and services. Hyperinflation, is different from Inflation, in terms of magnitude and the speed with which prices rise. An economy is said to be facing hyperinflation when the monthly inflation rate exceeds 50% for a sustained period of time. At this rate, … Read more

Economies of Scale

What are Economies of Scale? In simple terms, economies of scale implies that per unit production cost decreases as the scale of production increases. Why does this happen? This is because, production of a good or service has both fixed and variable costs. Fixed cost, as the name suggests, are constant. As the production level … Read more

What is Monopoly?

Monopoly Definition Monopoly, in economics, implies presence of a single supplier or producer of a product. ‘Mono’ means single and ‘Poly’ means supplier. Thus, monopoly, is a market structure characterized by a single supplier of a commodity which doesn’t have close substitutes. Since there is a single producer and there is lack of competition, the … Read more

What is Oligopoly?


Oligopoly Meaning Oligopoly is a market space where only few sellers or producers exist. Oligopoly mostly happens in those markets where goods are broadly the same and provide similar benefit to consumers. Since products offered by these producers are broadly the same, if one firm raises price, they would risk losing market share to the … Read more

What is Opportunity Cost?

Opportunity Cost

Opportunity Cost Meaning Opportunity cost is the benefit foregone or loss of value that is incurred when one alternative is chosen over the other. Mathematically, opportunity cost is the difference between the expected return from option foregone and the expected return from the option chosen. Looking at opportunity costs, might help you make better investment … Read more