Answer:
A) production is determined by the interaction of supply and demand.
Explanation:
A pure market economy is an economy where production decisions are made by the forces of demand and supply. there is no intervention of the government in production decisions
Characteristics of a pure market economy
- Private ownership of means of production
- freedom of choice. Producers are free to produce what they desire
- competition among producers
- no government intervention.
Assume that the market for corn is perfectly competitive. Currently, firms growing corn are generating losses. In the long run, we can expect "some firms to exit causing the market price of corn to rise.".
<h3>What is perfectly competitive market?</h3>
According to economic theory, perfect competition exists when all businesses sell the same goods, market share has no bearing on prices, businesses can enter or quit the market without any obstacles, consumers have perfect or complete information, and businesses are unable to set prices.
There are five characteristics that have to exist in order for a market to be considered perfectly competitive. The characteristics are -
- homogenous items,
- no entry or exit obstacles,
- price taker sellers,
- transparent products, and
- no seller has any control over market prices.
The three key components of perfect competition are as follows:
- There are a lot of buyers and sellers in the market.
- These buyers and sellers are in competition with one another.
- The good being offered or purchased is uniform.
- Companies are free to enter or leave the market.
To know more about; Why is perfect competition the best form of market structure?, here
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Answer:
Allocative efficiency is about distributing or allocating resources in the best possible manner. E.g. in order to fight the current pandemic, more resources ($) is allocated to different health care institutions.
Productive efficiency is about how a company or a person uses the resources that it has in order to produce the greatest amount of benefits at the lowest possible cost. E.g. in a hospital, if a doctor is able to treat 15 patients per day, his/her productive efficiency will be higher than another doctor that only treats 10 patients per day.
Answer:
The total of the combined salaries of all the employees at Company E after July 1 last year was 110% of that before July 1 last year.
Explanation:
If we use numbers, as example, we can get that:
Before July 1st Company E' s employes had in average salary of $100.000 (example).
If, after the decreased of employees, average salary was 10% percent more, that means that:
- $100.000 x 10%= <u>$10.000
</u>
So, total of combined salaries after decreased was
- $100.000+$10.000= $110.000
$110.000 is the 110% of the average salary before decreased because:
- <u>$110.000/100.000 = 110%</u>