Supply and Demand in Financial Markets

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Supply and Demand in Financial Markets?In any market, the price is what suppliers receive and what demanders pay. In financial markets, those who supply financial capital through saving expect to receive a rate of return, while those who demand financial...

Usury Laws as Price Ceilings in Financial Markets

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

How are Usury Laws as Price Ceilings in Financial Markets?Usury Laws act as Price Ceilings in Financial Markets as they prohibit lenders from charging above a stated rate of interest.The demand and supply model predicts that at the lower price ceiling interest rate,...

Market Competition and Innovation

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

How does Market Competition Affect Innovation?Market competition can provide an incentive for discovering new technology because a firm can earn higher profits by finding a way to produce products more cheaply or to create products with characteristics consumers...

Price, Supply, and Demand in the Labor Market

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

How do Price, Supply, and Demand in the Labor Market?Markets for labor have demand and supply curves, just like markets for goods. The law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a...

Equilibrium Wage – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Equilibrium Wage?At equilibrium, the quantity supplied and the quantity demanded are equal. Thus, every employer who wants to hire at this equilibrium wage can find a willing worker, and every nurse who wants to work at this equilibrium salary can find a...

Shifts in the Demand for Labor

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What Causes Shifts in the Demand for Labor?The demand curve for labor shows the quantity of labor employers wish to hire at any given salary or wage rate, under the ceteris paribus assumption. A change in the wage or salary will result in a change in the quantity...