Economics

Substitution and Income Effect, Topics in Demand and Supply Analysis, CFA Level I, Economics

Sep 4,20

Blog article 4, Substitution and Income Effect, Topics in Demand and Supply Analysis, CFA Level 1 Economics We consider the household optimum in a two-goods world.If the price of the first good rises, then the budget line turns inwards on the x1 axis. We can then distinguish between – Overall effect, – Substitution effect and – Income effect where the …

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Monopoly, CFA Level I, Economics, The Firm and Market Structures

Sep 3,20

Blog article 3, CFA Level 1 Economics This blog post deals with an important topic from Reading 15, “The Firm and Market Structures“, namely the calculation of the optimal quantity and the optimal price in a monopoly. 1. The monopolist must first know the inverse demand function (P = a – b*Q). So if only the demand function (Q = …

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