Behavioral Economic Theory Solves: Consumer and Labor Market
- ISBN-10
- 1654324388
- ISBN-13
- 9781654324384
- Pages
- 84
- Language
- English
- Published
- 2020-01-02
- Author
- Johnny Ch Lok
Description
⦁Supply and demand and price elasticities principle predict oil energy user behaviourThe another case is that demand and supply principle can predict oil buyer behaviour to find whether what factors can cause the oil buyer individual need reduces. For example , a rise in production costs increases market prices and reduces quantities demanded and supplied. Or when, energy cost rise, utility bills increases and households fid extra ways of saving heating and electricity. But, others are nor. For example, whether a tax is imposed on the producers or consumer of a commodity, say oil has nothing to do with who ends up paying for it. The tax might be administered on oil companies, but it might be consumers who really pay for it through higher prices at the pump. Or the extra cost might be imposed on consumers in the form of a sale tax, but the oil companies might be forces to absorb it through lower prices. It all depends on the " price elasticities" of demand and supply. With the addition of extra assumption, this model also generates rather strong implications about how well markets work. In particular, a competitive market economy is efficient in the sense that it is impossible to improve one person's well-being without reducing somebody.
