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Microeconomics: Impact on Economy and Society

   

Added on  2020-03-01

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Running head: MICROECONOMICSMICROECONOMICSName of the studentName of the universityAuthor note
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1MICROECONOMICSHarry potter and the Curse of Market Forces: A muggle's gameThe given assignment deals with micro economic ideas to understand the topic in a moreclear way. In terms of market structure, there are two main forms of market in a capital marketstructure and that are primary market and secondary market. Primary market includes issue ofthe new securities. Here the investors directly purchase securities from the company (Alcaro etal., 2016). It invests for long-term purpose and corporate sectors create funds form capitalmarket. Capital can be issue by using private placement process, right to issue, preferentialallotment and government offerings (Currie, Peel & Peters, 2016). Whereas, secondary market isalso a form of capital market or financial market that deals in those securities that are alreadyissue in primary markets like stocks and bonds that is why known as secondary market.Secondary market deals with stock market and analysis. Secondary market creates price(Campbell et al., 2017). There are two different type of secondary market and they are dealers’ business marketand auction market industry. In case of auction business market, it involves the businesstransaction between the seller and the buyer in the market for the purchase and sale of financialsecurities at a fixed rate. The seller or the auctioneer announces the rate of exchange publicly inthe market. In case of dealers’ business industry, the business transaction takes placeelectronically that is using telephonic, fax or electronic machines. Two micro economic ideas- Demand- Demand is the willingness or the wants and necessities made by the consumers or thecustomers. It means the willingness to purchase a commodity in exchange of money at a place
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2MICROECONOMICSPP1SS1called market. It includes the factors of price and quantity. Law of demand says that with therise in price creates less demand, on the other side fall in price will create more demand andpurchasing power for the product (Dean et al., 2017).Supply- Supply on the other side means the fulfilling of those wants and willingness made bythe consumers or the customers (Fine, 2016). Due to good weather condition, supply rises withgood production. Supply depends on market factors, technology, and production unit and pricefactor. According the supply law, Supply rises with the rise in price and quantity output.Figure1: Changes in price and quantity with respect to supplyDecrease in price creates rightward shift in the supply from s to s1 leading to more output that isfrom q to q1.QQ1D
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