#ib econ

[aestudier]

{ 23-5-17 } 80/100 days of productivity

Guess who’s in love ? Me . This is my new study home!!!!!

** also, regarding the sudden terrorist attack in Manchester, I hope all of you and your family and friends stay safe 😔the world can be a scary place and we need more love!! Take care of yourselves

[buriedintextbooks]

march 26, 2017 // exams are coming up and my bf and i thought the best way to prepare would be a study date

[aestudier]

{ 23-4-17} 72/100 days of productivity Macroeconomics ft. Starbucks + blackbear's new album!!

[aestudier]

{ 9-5-17 } 75/100 days of productivity

A very messy starter plan for my econ IA ♥ For those who have asked about my stationary: I got this milkbox pencil case from @studyblr-store​ !! ~  (use my code MEGS for 10% off if you want matching pencil cases as meeeeeeeee)

— I track #heyaestudier

[revisingpotato]

78~79% || More progress! Externals is in 2~3 weeks /shudders

ゼブラこころは安くて書きやすいし最近気に入った！オススメです。

[revisingpotato]

76~77% || Working on review sheets for econ (because condensing the 600pg textbook to 70pg worth of revision notes is still too much). Aim is to get it done this weekend so I can start doing past papers again OTL.

[ultimateguidetoib]

SL Economics IA SAMPLE

DISCLAIMER: THIS IS TO BE USED AS AN EXAMPLE ONLY. DO NOT PLAGIARIZE.

American telecommunication companies Sprint and T-Mobile have been volleying back and forth offering lower prices to customers who switch their subscriptions.

These promotions are an effort to raise demand and revenue for each company while decreasing demand for their rival company as the holiday season approaches. Demand is the amount of a good or service that is bought at a particular price over a particular period. The law of demand states that quantity demanded and price share an inverse relationship. If the price of a product rises, then the quantity demanded will decrease. If the price of a product decreases, the quantity demanded will rise, which is what Sprint and T-Mobile are essentially trying to implement. Sprint and T-Mobile’s services are also substitute goods, goods that may be used in place of each other. As the price of one good falls, the demand of the other will also fall, shown by Figure 1.  Since Sprint was offering a lower price to consumers, T-Mobile decided to outdo Sprint’s prices putting Sprint in the position T-Mobile was previously in.                      

Sprint initially reduced its prices because of the anticipated holiday season sales, hoping that the market for their services would be price elastic in demand.  If a product is price elastic in demand then a change in price will lead to a bigger percentage quantity response. Thus if price falls, quantity will increase by more, and total revenue, the income that a business receives from selling its product, will rise. Even though the price per unit is low, consumers are more attracted to them, and this leads to a bigger profit for suppliers. By reducing prices, both Sprint and T-Mobile hoped to increase their overall revenue.

In this kind of situation, the consumer usually benefits from businesses that are competing with each other. Competition is the rivalry among buyers and sellers of output and one of the regulating forces of the market. Following the law of demand, Sprint and T-Mobile are looking to increase quantity demanded by reducing prices and the lower the prices go, the more quantity demanded will increase. This would result in extremely low prices and better deals for consumers.

However, price wars like this one could have a negative effect on consumers as well. If a company large enough is able to reduce prices to a low enough level it could drive other producers out of the market. This means buyers would be left with less choices and ultimately give that one company complete dominance over the market, creating a monopoly. In addition, this would also have a negative effect on suppliers. Not only do price wars have the capability to establish a monopoly, they also drive retailers out of the market. Not all businesses can compete at such low prices because the cost would be outweighing the benefit. Producers would no longer be making a profit and be forced to leave the market. A negative result of price wars on suppliers is that they end up competing against themselves. The competition drives prices so low that often producers back themselves into a corner and are not able to bring prices back to equilibrium, a situation in which the plans of buyers and sellers exactly coincide so that there is neither excess supply nor excess demand.

This is an example of how prices serve as an incentive and signaling function to both consumers and producers. The need for Sprint and T-Mobile to lower the prices of their services showed that the quantity demanded was too low at the price suppliers were selling at because consumers were not willing to buy at that price. This signaled the producers to lower prices of their services and these low prices provided incentive for consumers to increase their quantity demanded for these services.

To avoid the negative effects of a price war, businesses should implement temporary discounts that appeal to customers more rather than a simple price cut, such as bundle offers. Businesses can also choose to retarget the type of consumers they are trying to appeal to. Price wars mean lower prices so businesses are automatically appealing to the lower class and have lost the upper/middle class appeal in the market. Businesses can also take actions such as emphasizing the quality of their product over their rivals’ to make their products seem more attractive to consumers over low prices.

Competition is healthy; however aggressive competition can become deadly for not only producers, but also consumers and the market as a whole.

ARTICLE

[claremontdreams]

I wanted to give a shoutout to Gojimo, an app that has hundreds of quizzes on a bunch of topics- SAT, IB, ACT, GCSE, A Levels etc.

Great for this upcoming exam season. 

http://www.gojimo.com/