Search results
Results From The WOW.Com Content Network
The model was first presented by Oliver Williamson in his 1968 paper "Economies as an Antitrust Defense: The welfare tradeoffs" in the American Economic Review. [2] Williamson argued that ignoring efficiencies that may result from proposed mergers in antitrust law "fail[ed] to meet the basic test of economic rationality". [3]
In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is the loss of the most preferred alternative given up. [2] A tradeoff, then, involves a sacrifice that must be made to obtain a certain product, service, or experience, rather than others that could be made or obtained using the same required resources.
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
Some examples of the types of problems that the tools provided by managerial economics can answer are: The price and quantity of a good or service that a business should produce. Whether to invest in training current staff or to look into the market.
As the debt equity ratio (i.e. leverage) increases, there is a trade-off between the interest tax shield and bankruptcy, causing an optimum capital structure, D/E*.The top curve shows the tax shield gains of debt financing, while the bottom curve includes that minus the costs of bankruptcy.
In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time.
The business model canvas is a strategic management template used for developing new business models and documenting existing ones. [2] [3] It offers a visual chart with elements describing a firm's or product's value proposition, [4] infrastructure, customers, and finances, [1] assisting businesses to align their activities by illustrating potential trade-offs.
There are two main standards of thought on economic efficiency, which respectively emphasize the distortions created by governments (and reduced by decreasing government involvement) and the distortions created by markets (and reduced by increasing government involvement).