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ACKNOWLEDGEMENT

The researcher would like to acknowledge the work of God in his life and for the guidance that
was given to him to aid in the completion of his project. He would also like to give special
thanks to his teacher who provided guidance that contributed to the progress of this assessment.
Special thanks to the Staff of Johnsons Copy Centre, Who accommodated my interview and
made useful information available.

Lastly, the researcher would like to express his gratitude to his parents and friends who provided
guidance and financial support to aid in the completing of the research.

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FIRM PROFILE

Johnsons Copy Centre was the firm that the researcher selected to carry out this investigation for
the internal assessment .The firm specializes in the providing of internet services, printing,
photocopy and stationary and was founded in 2000 by Ray Johnson, the current founder.

The firm is located in West minister, La Parfaite Harmonie Demerara. The firm is sole proprietor
structure company and contain 5 (Five) other workers who are in charge of the maintaining of
the other departments.

The Firm originated from an Internet Caf founded in 2000 which expanded to accommodate a
Printing and copying service with the selling of stationary also .The Business grew in the 2001
when the demand for these services increased and the name Johnsons Copy Centre was
maintained although additionally services was being offered .

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TITLE

A Study of the Market Structure under which Johnsons Copy Centre operates during 2012-2015;
to outline the main characteristics of the identified market structure, and the externalities of
production associated with the firm.

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AIMS

To identify the market structure under which Johnson Copy Centre operates.
To Outline the main Characteristics of the identified market structure.
To identify the Trend in revenues for Johnsons Copy Centre over the Past 5 Years.
To determine the main factors responsible for this trend.
To assess the impact of this trend on Johnsons Copy Centre Profits.
To state the uses of the Profits for Johnsons Copy Centre.
To outline the externalities of production associated with Johnsons Copy Centre.
To ascertain the extent to which Johnsons Copy Centre operations are influenced by the state.

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Methodology /Research Design

SOURCES OF DATA

PRIMARY DATA

Primary data is raw information collected by the researcher for conducting his/her research. The
information that was obtained was used to achieve the aims of the research and the main purpose
that was established by the researchers mind and also in the event that more information is
needed the research can easily obtain it. One Method that was used was the preparing of an
Interview Schedule .The Interview enabled the researcher to have a face to face discussion with
the Owner so that factual information can be obtained .This interview was done on the 18th
November,2016 at the firm . A number of 11(eleven) questions was asked .

Secondary data is the data that have been already collected by and readily available from other
sources. Such data are cheaper and more quickly obtainable than the primary data and also may
be available when primary data cannot be obtained at all.

Advantages of Secondary data

It is economical. It saves efforts and expenses , It is time saving, It helps to make primary data
collection more specific since with the help of secondary data, we are able to make out what are
the gaps and deficiencies and what additional information needs to be collected. The use of
Edward Bahaw Economics for Cape, Investopedia and Economicsonline.uk provided factual
information on economical concepts and enabled a faster way to analyze the information.

Limitations To Study

The initial business was Metro but inefficient information was given and the supervisor was
unavailable thus the research paper and interview schedule was prepared to accommodate an
interview done with Ray Johnson.

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PRESENTATION OF DATA

CRITERION 1: To Identify the trend in revenues for Guyana Stores over Past 5 Years

General Theory

Revenue is the amount of money that a company actually receives during a specific period,
including discounts and deductions for returned merchandise. Additionally, Tax revenue is
income that a government receives from tax payers.

Revenue should also be relatable to a specific time frame or a fixed quantity sold. Total Revenue
is the total money received from the sale of all units. The formula is as follows: Total Revenue
=Selling Price * Quantity

Example of Total Revenue

Dave bought (500) Five hundred pens at a unit cost of $20.00, the total revenue that will be
received by the business is:

500 * $20.00 = $10,000

Trend analysis can be used for benchmarking, without which it's difficult to know whether your
business decisions have been successful. For example, if you lowered the price of your most
popular product to improve your sales volume, you need to check in again periodically to
confirm that sales volume is actually progressing and that profits are improving as well. If your
decisions aren't producing the results you intended, you can change your tactics. If you don't
continue to follow the trends and analyze the results, you won't know whether you made the right
decision or not. Many business owners use trend analysis to find out how they're doing compared
to competitors. Comparing your company with others in your industry can help you make
strategic decisions. For example, your trend analysis may show that your revenue per customer
was above the industry average for your first few years in business, but is now below the
industry average. With that knowledge, you know you need to take action to increase revenue
per customer through up-selling, price increases or other tactics.

Source: Investopedia

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Specifics to Study

In determining the Total Revenues for Johnsons Copy Centre it is necessary that one should
acknowledge that the firm offers more than more good/service.

Over the Study period (2011-2016), Johnsons Copy Centre revenue was $103,260.000 in
2011.Interent service earned $20,500, Printing earned $27,566, Photocopying earned $37,586
and Stationary earned $17,608 .In 2012, the printing service earned $30,566, the Internet service
earned $37,500, the stationary supply earned $15,000 and the photocopying service earned
$66,934 giving a total revenue of $150,000. In 2013, the internet service earned $43,000 and the
Printing Service earned $56,500followed by the photocopying that earned $40,000 giving a
total revenue of $189,760.In 2014, the internet service earned $20,560 , the photocopying
service which earned $80,050 , the stationary service which earned $30,520 and printing earned
$44,520.The firm earned $175,650 in the year 2014.

In the Year 2015, the printing service earned $22,900, the photocopying service earned $42,540,
and the internet service earned $80,400, giving a total of $225,890.

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A Line Graph Showing the Trend of Revenue in Johnsons Copy Centre (2011-2016)

Revenue Trend in Johnsons Copy Centre (2011-2016)


$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
2011 2012 2013 2014 2015

Internet Service Printing Photocopying Stationary

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CRITERION 2: To Determine the Main Factors Responsible For This Trend

General Theory

Three Factors that affect the level of revenue for products / firms are:

Sales (Sales Capacity) The ability to convert non customers into customers and the cost to buy
goods.

Innovation - Building of New products that didnt exist before and enhancing existing products.
Marketing The sending of deals and campaigns that are highly relevant to the customer which
will generate demand as well as loyalty.
Source: Investopedia

Specifics to Study
Johnsons Copy Centres Revenue can be influenced by the price of the good or service that they
provide and the income of the consumer .Factors affecting the firms sales are:
Price Elasticity of Demand (PED) is the measure of the degree of responsiveness to the
quantity demanded of a product to the changes in its price.
Formula: PED = %QA %PA
Income Elasticity of Demand (YED): can be defined as the defined as the degree of
responsiveness of the quantity demanded of a product to the changes in customers
income.
Formula: YED=%Q %Y
Cross Elasticity of Demand: (XED) refers to the degreed of the responsiveness of the
quantity demanded of one good (Good A) to the changes in the price of (Good B).

The Calculation of the Price Elasticity of Demand in Johnsons Copy Centre will show the
relationship between the price of a good and the quantity demanded.

PED = %QA %PA

= 0.20 0

PED = 0.20

Therefore PED = 0.20: 1

This (PED) result shows that (PED) is inelastic.

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CRITERION 3: To Assess the impact of this Trend on Johnsons Copy Centre Profits

General Theory
Profit is a financial benefit that is realized when the amount of revenue gained from a business
activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is
gained goes to the business's owners, who may or may not decide to spend it on the business.

Calculated as: Profit= Total Revenue Total Expenses

Revenue is the amount of money a company receives from sales and other charges to customers.
Profit, however, is the amount of money left over from a companys revenues after its expenses
have been subtracted, such as supplies for creating a product, taxes, rent, marketing, and even
payroll expenses. A company can have revenue without making a profit, but cannot have a profit
without any revenue.

A company may have significant revenue but enjoy very little profit from its sales. This usually
occurs because a company's expenses are so high that they make it hard for the company to earn
a profit. Sometimes, however, revenues can be so low that even small expenses can eat away at
the company's potential profits.

There are three types of profit:

Normal Profit: The minimum amount of profit that is necessary to entice the firm to
continue producing the good/service usually ,this may be determined by the amount the
entrepreneur could receive in his or her next best job.
Abnormal Profit: Any profit earned in excess of normal profit .
Sub normal Profit : This is known as income generated that is less that the average cost

Source: Ibsurvival.com

Specifics to Study

Due to the obtaining of more capital, the firm now operates at a higher capacity .After covering
the firms overall cost for the year 2011 which amounted to $60,630, hence leaving a profit of
$42,630. On this amount tax was extracted also which ultimately leaves the firm with $32,630
after the tax of $$10,000 was extracted. In 2012, the total revenue was 150,000 and the

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extraction of tax which was 12,750 and the cost incurred during production which amounts to
$52,700 which will leave the firm with a remainder of $184,550. In 2013, the total revenue of the
firm was $189,760 and the extraction of $10,900 in tax and 48,900 in the cost of production
leaving the frim with $129,960. In 2014, the total revenue of the firm was $175,650 and with the
extraction of tax costing $14,000 and the cost of production costing $60,000, leaving the firm
with $101,650. In 2015 the total revenue of the firm was $225,890, however with the extraction
of tax costing $18,800 and the cost of production was $65,000 leaving the firm with $142,090.

A Time Graph Showing the Profit and Revenue in Johnsons Copy Centre

Time Graph Showing the Relations of Profit and Revenues


in Johnsons Copy Centre (2011-2016)
250,000 225890

189900
200,000 175650
150000 142090
150,000 129960
101650
100,000 84,550
60,630
50,000 32,630

0
2011 2012 2013 2014 2015
Profit 32,630 84,550 129960 101650 142090
Revenues 60,630 150000 189900 175650 225890

Profit Revenues

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CRITERION 4: To State the Uses of Profits for Johnsons Copy Centre

General Theory

Profits are generally used for:

The Reinvestment of technology of the business. The Purchasing of equipment,


machinery upgrades, communication technology enhancement.
Increase the earnings of employees: The increase of salary/wages of the employees, the
increase of benefits and bonuses.
To expand the business .Profits will be used to develop the business to accommodate
more capital and costumers.
Profit is important to a business in order to survive, the business must be able to be a
source of income for the owner and also pay off expenses.

Source : Investopedia.com

Specifics to Study

According to Ray Johnson, the profits generated from the services offered by the firm are used
for the expansion of the business, the purchasing of capital such as printers / copiers to make the
business more efficient and the betterment of the employees which includes benefits /salaries

USES OF PROFITS BY JOHNSONS COPY CENTRE

Savings, 20
Expansion , 28

Capital , 13

Equipment Payment of
(Purchasing and Employees , 19
Repairs ), 20

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CRITERION 5: To outline the externalities of production associated with Guyana Stores

An externality is a consequence of an economic activity experienced by unrelated third parties; it


can be either positive or negative. Pollution emitted by a factory that spoils the surrounding
environment and affects the health of nearby residents is an example of a negative externality.
The effect of a well-educated labor force on the productivity of a company is an example of a
positive externality.

A negative externality is an economic activity that imposes a negative effect on an unrelated


third party. It can arise either during the production or the consumption of a good or service.

A positive externality is the positive effect an activity imposes on an unrelated third party.
Similar to a negative externality, it can arise either on the production side, or on the consumption
side.

Specifics to Study

Due to Johnsons Copy Centre providing priniting , coping , stationary and internet service
leaves the firm with little or no negative externality . Hence most of the externalitites present
are positive . The positive exteranilities that exisits in the firm are the training of workers to use
the equipments which can be beneficial to them incase they become occupationally mobile .
By Providing stationary to the public this enabled the delivery of the presentations and
indviduals better whereby giving other individuals a better understanding of what is being done .
This will promote an easy way of learning and create more useful indivdiausls in the community
that it draws resources from .
The waste papers from priniting and photocopying would be placed in bins and burnt . The
smoke from the fire would affect those that have asthma and other breathing issues in the
ccommunitu as well as the employees .

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CRITERION 6: To ascertain the extent to which Johnsons Copy Centres operation are
influence by the state

Government intervention is regulatory action taken by government that "interfere" with decisions
made by individuals, groups and organizations about social and economic matters.

Governments intervene in markets to address inefficiency. In an optimally efficient market,


resources are perfectly allocated to those that need them in the amounts they need. In inefficient
markets that is not the case; some may have too much of a resource while others do not have
enough. Inefficiency can take many different forms. The government tries to combat these
inequities through regulation, taxation, and subsidies. Most governments have any combination
of four different objectives when they intervene in the market.

Maximizing Social Welfare

In an unregulated inefficient market, cartels and other types of organizations can wield
monopolistic power, raising entry costs and limiting the development of infrastructure. Without
regulation, businesses can produce negative externalities without consequence. This all leads to
diminished resources, stifled innovation, and minimized trade and its corresponding benefits.
Government intervention through regulation can directly address these issues.

Another example of intervention to promote social welfare involves public goods. Certain goods,
like public parks, aren't owned by an individual. This means that no price is assigned to the use
of that good and everyone can use it. As a result, it is very easy for these assets to be depleted.
Governments intervene to ensure those resources are not depleted.

Macro-Economic Factors

Governments also intervene to minimize the damage caused by naturally occurring economic
events. Recessions and inflation are part of the natural business cycle but can have a devastating
effect on citizens. In these cases, governments intervene through subsidies and manipulation of
the money supply to minimize the harsh impact of economic forces on its constituents.

Socio-Economic Factors

Governments may also intervene in markets to promote general economic fairness . Government
often try, through taxation and welfare programs, to reallocate financial resources from the

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wealthy to those that are most in need. Other examples of market intervention for socio-
economic reasons include employment laws to protect certain segments of the population and the
regulation of the manufacture of certain products to ensure the health and well-being of
consumers

Source: Economicsonline.com

Specifics to Study

The Government use of price flooring and Ceiling in the Market regulates the amount that each
business inclusive of Johnsons Copy Centre places on a good or service .This will ensure that
although the business is dominant in the market , the consumer will not be paying an excess
amount and the producer will not be receiving a small amount thus allowing them to cover their
average cost .The Imposing of 30% tax on the firm after the cost have been covered is a method
used to ensure that sufficient revenue is generated by the government and this can also motivate
the producer to invest in capital so that larger revenue will be generated thus the tax will not have
a large effect on the firm. Additionally the distribution of subsides will aid many firms to
develop at a faster rate and achieve larger amount of revenue thus allowing the business to be
productive.

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CRITERION 7: To identity the market structure under which Guyana Stores operates

General Theory

Market structure is best defined as the organizational and other characteristics of a market. We focus on
those characteristics which affect the nature of competition and pricing.

-Perfect competition: the efficient market where goods are produced using the most efficient
techniques and the least amount of factors. This market is considered to be unrealistic but it is
nevertheless of special interest for hypothetical and theoretical reasons.

-Imperfect competition, which includes all situations that differ from perfect competition. Sellers
and buyers can influence in the determination of the price of goods, leading to efficiency losses.
Imperfect competition includes market structures such as:

-Monopoly: it represents the opposite of perfect competition. This market is composed of a sole
seller who will therefore have full power to set prices.

-Oligopoly: in this case, products are offered by a series of firms. However, the number of sellers
is not large enough to guarantee perfect competition prices. These markets are usually studied by
analyzing duopolies, since these are easier to model and the main conclusions can be
extrapolated to oligopolies. Eg. Airlines within the Caribbean

-Monopolistic competition: this market is formed by a high number of firms which produce a
similar good that can be seen as unique due to differentiation, which will allow prices to be
above marginal costs. Eg. Barbers in Georgetown.

Specifics to the Study

Johnsons Copy Centre operates under a monopolistic market structure where the firms can enter
and exit the industry at will .Due product differentiation and many suppliers each firm is small
and relative to the industry as a whole .Due to the freedom of entry and exit into this industry
many competitors exist such as Metro, Gordons, Image plus, Toms Copy Centre. This gives a
total of four competitors that offer the same service. Johnsons copy Centre offers Internet service
Access to the customers through the desktops provided. Printing and Photocopying is also being
done. The business supplies a large amount of stationary such as pens, pencils, and ink for
printers, toners and books.

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CRITERION 8: To outline the main characteristics of the identified market structure.

General Theory

The General Characteristics of the Market Structure (monopolistic) Under which Johnsons Copy
Centre Operates are:

Large Numbers of Sellers are Found in this industry


Product Differentiation There are real differences in the output produced by firms across
the industry.
There are no barriers to entry and exist to the industry.

Source : Investopedia .com

Specifics to Study

In the Monopolistic Industry, Johnsons Copy Centre will have many competitors due to the
freedom to enter and exit such as Metro, Gordons, Image Plus and Toms Copy Centre. The
Competitors of Johnsons Copy Centre are dispersed around the city where by enabling the access
of more customers, the quality of public goods such as roads and lights enable the firms to be
accessible at any time. These business will able to generate more profits and acquire more capital
such as printers and copiers which will give them an edge on the market because of the increased
quality.

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Interpretation/ Analysis of Data

Johnsons Copy Centre has been a newly developing business in La Parfaite


Harmonie/Demerara since 2000.The Firm operates under the monopolistic market structure
.Theoretically , this market structure involves majority of the characteristics of a perfect
competition except instead of homogeneous products there are heterogeneous products as the
output of each firm can be distinguished from that of rival firms .Due to this market Structure ,
firms such as Johnsons Copy Centre tend to engage in product differentiation apart from just
branding and advertising to get an edge over the dominant firms .The Monopolistic Market
structure allows firms to enter into the market and leave at will and in the short run ,when the
dominant business experience abnormal profits , smaller producers / Entrepreneurs will be
motivated to create new firms ,thus as the amount of small firms increases , the probability of
achieving abnormal profits would have been decreased. The revenues earned between 2011-2016
that were constantly increasing as the use of technology increased, the number of employees , the
introduction of new products and the use of advertising .Johnsons copy center acquired a steady
increase in profit as well as revenue this showing growth in the firm. Thus the firm experienced
abnormal profits before it was faced by other firms ,additionally it can be said that Johnsons
copy center development and growth is based on the amount of firms in the industry .The
Monopolistic Structure allows the firms to make their own prices for their products due to the
differences in products among the rival firms .However when a business is developing (Johnsons
Copy Centre ) the firm would take the industry price as a starting point or guideline and this
ability will create a downward sloping demand curve .

In the Short run , Johnsons Copy Centre has obtained Economies of Scale due to being the sole
producer in the area which opened windows of opportunity to enjoy economies of scale. The use
of technology makes this process more efficient and ultimately creating more outputs. The use of
economies of scale generates high levels of profits from the firm due to the large amount of
output being sold at a lower cost. The large amount of profit that will be acquired by the firm
will be used for the overall development of the firm and innovation. This market structure also
enables consumers to have a greater variety of choices due to product differentiation. Product
differentiation allows the consumers to choose according to their own taste.

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Though this advantage may benefit mainly the consumers the producers will not be able to
achieve allocative and production efficiency due to the markets demand for the focus on more
than one good which may not be the good that is achieving high levels of demand.

Furthermore , Johnsons copy Centre would have been experiencing some drawbacks in the long
run , due to the increase of competitors in the market that have become more dominant , there is
a constant need for the frim to keep improving products. As a consequence to the firms incentive
to maximize profits , they will need more technology to get this done and the smaller firms in the
long run will not be able to achieve this , in contrast , the location of the competitors will also be
a determining factor because Johnsons Copy Centre maintains abnormal profits due to being the
most accessible firm in the area that allowed them to earn a large amount of revenue as shown in
the line graph (criterion 1 ) , the amount of revenue generated by the frim would continue to
increase due to the dependency on technology over the past 5 years . The increase in the amount
of revenue will create room for the development which occurred in 2013 and the business
expanded and recruited more employees to manage the different sectors in the firm. Due to the
steady rate of revenue increase, the firm will be able to improve products, create more
departments and employ more machinery to make output level more efficient. The steady level
of profits increase in Johnsons Copy Centre indicates that the average revenue is greater than
the average cost.

Additionally, there are some external cost and benefits associated with Johnsons Centre. The
firm involves in the transporting of goods and services which aids in traffic congestion, the
burning of waste papers which contributes to air pollution .Conversely, external benefits which
are known to be those gains and rewards enjoyed by the third parties in instances where
Johnsons copy Centre sell their goods and services . They include the promotion of quality
delivery of education to students, the reduction of unemployment and creates training
opportunities.

The Government intervene in the markets to maintain efficiency. Efficient markets are those
markets that allocate the resources in the amounts that are needed in contrast to inefficient
markets that may have unevenly allocated resources. Due to this, the government tries to reduce
these errors by means of subsidies, regulation and taxation. So that negative externalities can be
reduced, the intervention of the government will reduce the wasting of resources ,reduction of

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trade and unemployment of workers by the use of regulations .However ,if inflation ,rise in
unemployment or economics recession occurs , the government will intervene by either subsides
or the use of taxation to minimize the impacts .

In conclusion, Johnsons Copy Centre operates in an Monopolistic environment and due to its
location it will continue to experience all of its benefits .

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Findings

It was found that Johnsons Copy Centre operates under the Monopolistic Market
Structure .This market enables free entry and exit .However due to the firms location, it
experiences a high demand rate.
Johnsons Copy Centre has been experiencing an upward shift in the levels of revenue
being received as the use of technology, expansion and more workers aided with the
decrease in cost of production and increase in profits consequently.
Due to Johnsons Copy Centre transporting goods in Georgetown and in Demerara allows
the vehicle to contribute to traffic congestion, the burning off garbage that contributes to
air pollution and also the development of the educational sector in the society.
It was also found that many of the operations done in Johnsons Copy Centre are being
controlled by the government such as rules and regulation, tax and subsidies.

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Recommendations
Dear Sir ,
The researcher would like to show gratitude for the information given on your
firm, however he believes that there are some improvements that can be made to
maximize growth.
The company should invest more profits in advertisements so that there can be an even
greater increase in profits to spread news of the promotions etc. This can be done by
making contracts with television stations which will enable them to pay monthly or
annually.
The reduction of the Johnsons Copy Centre Transportation in traffic congestion can be
reduced if a planned schedule at the end of a specific time frame is created so that
supplies collected when needed.
Due to the business consisting of self-employed individuals they are eligible for tax
deductions in some of their expenses .this will aid in the reduction on money spent on tax
which can be used.
Please take my suggestions into consideration,
Yours truly
Jamol Benjamin

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Bibliography

Bahaw, E. (2007). Cape Economics . La Romanie : Caribbean Educational Publishers.

Johnson, R. (2016, November 18). Information on Johnson's Copy Centre. Owner. (J. Benjamin,
Interviewer) Georgetown.

Riley, G. (2016, December 18). TuTor2u. Retrieved from TuTor2u.net:


http://www.tutor2u.net/economics

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