Describe the Problems of Observer Bias and Observer Influence

question 169

Essay

Describe the problems of observer bias and observer influence.Using concepts from our textbook,discuss how these problems can be avoided.

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Definitions:

Price Setter

An entity, often a dominant firm or a monopoly, that has the ability to influence the market price of goods or services rather than being a price taker.

Price Taker

An individual or company that must accept prevailing prices in the market, having no influence over them.

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, and very easy entry and exit, leading to firms being price takers.

Natural Monopoly

A market condition where a single firm can supply a product or service at a lower cost than two or more firms, due to economies of scale.