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Economists use the word efficient to mean any of several closely related things: [12] No one can be made better off without making someone else worse off (Pareto efficiency). No more output can be obtained without increasing the amount of inputs. Production proceeds at the lowest possible per-unit cost.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
In economics, the profit motive is the motivation of firms that operate so as to maximize their profits.Mainstream microeconomic theory posits that the ultimate goal of a business is "to make money" - not in the sense of increasing the firm's stock of means of payment (which is usually kept to a necessary minimum because means of payment incur costs, i.e. interest or foregone yields), but in ...
Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". [1] Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning ...
Private equity firms have access to multiple streams of revenue, many of those unique only to their industry. There are really only three ways that firms make money: management fees, carried ...
In economics, unit of account is one of the functions of money. A unit of account [1] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the ...
Proper capital management is important to the financial health of a firm, with efficient resource allocation through capital management, firms can improve its cash flow and profitability. Capital management involves tracking various ratios within the firm, most important ones include: [92] Capital ratio; Inventory turnover ratio; Collection ratio
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