One person consuming the good does not stop another person consuming it.
Selling state-owned assets into the private sector.
→ Same industry
→ Different stages of production
This is legal.
Finding ways to reduce your tax bill.
Working the system to your advantage.
→ The central bank will buy the its currency off FOREX markets using its reserves. The amount of currency bought is Q3 - Q1.
→ This will shift demand right until there is no loner excess demand at Emin.
From 0 to X: Increasing Returns to the Variable Factor (teamwork)
After X: Diminishing returns to the variable factor.
→ Outward migration
→ Ageing population
→ Decreased factor mobility
→ Destruction of infrastructure
→ Increased regulations
Policies designed to make the economy more efficient by utilising market forces and removing government intervention.
People can benefit from using public goods without paying for them.
These people are Free Riders.
Because you can't charge for them, there is no incentive to supply them.
So the market under-provides these goods.
