Revisiting competitive strategy is one way to respond to a more competitive market. For example, in marketing, businesses identify what needs to be adapted to be relevant to today's competition and customer needs, whether related to the product,
Economic Context
Why Consumption Expenditure Matters: A Pillar of the Economy
Consumption expenditure, the money spent by individuals and households on goods and services, acts as the lifeblood of any economy. It's more than just individual purchases – it's a powerful driver of economic activity, impacting businesses, growth,
Economic Shocks: Disrupting Growth and Stability [Causes and Impacts]
What's it: An economic shock is a sudden and unexpected significant change in an economy's output due to changes in external factors. Shocks suddenly cause the aggregate supply curve or demand curve to shift to the right or left. Such events not
Long-Run Macroeconomic Equilibrium: Achieving Full Potential
What's it: Long-run macroeconomic equilibrium occurs when the aggregate demand curve intersects the short-run aggregate supply curve at the point of the long-run aggregate supply curve. In other words, the short-run macroeconomic
Why are some markets becoming more competitive?
Some markets become competitive for several reasons. Globalization is the first reason. It makes the competition map wider because it involves foreign players. For example, it encourages foreign goods to easily enter the domestic market, increasing
How Consumption Expenditure Affects the Economy
In macroeconomics, consumption expenditure affects the economy through aggregate demand. Economists include it as an item in aggregate demand in addition to business investment, government spending, and net exports. Thus, when consumption expenditure
How Does Unemployment Impact Individuals, Society, Businesses, and the Economy?
Unemployment has wide impacts. It doesn't just have consequences on the individual. But it also impacts society, business, and the economy. For example, unemployment causes:Unemployment impacts individualsOne of the most immediate
Short-Run Macroeconomic Equilibrium: Understanding Economic Fluctuations
What's it: A short-run macroeconomic equilibrium occurs when the aggregate demand curve and the short-run aggregate supply curve intersect. It determines the actual output (real GDP) and the price level in the economy.Equilibrium may be
Competitive Market: Characteristics and Examples
What it's: A competitive market refers to a market characterized by intense competition in which no player has a dominant power. It is identified as a perfectly competitive market with many buyers and sellers. And they individually cannot
The Hidden Forces Affect How Much Consumers Spend [7 Determinants Explained]
Several factors affect consumer spending. Disposable income comes first. Without it, there is no income to buy the product. Other factors include consumer confidence, wealth, income expectations, inflation, and interest rates.Why is it necessary
Supply Shock: Disrupting Markets and Investment Strategies [+ Causes and Effects]
What's it? A supply shock is a sudden and unexpected event that causes a dramatic change in output. It can be positive or negative. It is positive if it increases output and negative if it decreases output.Shocks here can refer to macroeconomic
Long-Run Aggregate Supply (LRAS): Potential Output and Its Drivers
Long-run aggregate Supply (LRAS) is a fundamental concept in economics, revealing the maximum output an economy can produce when all its resources are fully adjustable. Unlike the short run, where some factors are fixed, LRAS reflects a situation