Definition: Marginal revenue (MR) is the additional revenue gained from selling one extra unit in a period of time. Marginal revenue (MR) = Δ TR/Δ Q If a firm sells an extra 50 units and sees an increase in revenue of £200. Then the marginal revenue of each extra unit sold is £4 Example of …
Marginal utility theory examines the increase in satisfaction consumers gain from consuming an extra unit of a good. Utility is an idea that people get a certain level of satisfaction/happiness/utility from consuming goods and service. Marginal utility is the benefit of consuming an extra unit This utility is not constant. Often we get diminishing marginal …
Definition – A mixed economy means that part of the economy is left to the free market, and part of it is managed by the government. Mixed economies start from the basis of allowing private enterprise to run most businesses. Then the governments intervene in certain areas of the economy, such as providing public services …
Money illusion is the belief that money has a fixed value and the effects of inflation are ignored. Because of money illusion, during inflation, individuals may perceive an increase in nominal income as higher welfare – when this is actually an illusion and their real spending power has not changed because prices have risen at …
A commodity is usually defined as a raw material used in the production process or consumed on its own. Top 10 Commodities Crude oil Coffee Natural gas Gold Wheat Cotton Corn Sugar Silver Copper Most commonly traded commodities by group Other lists group together agricultural products into one group Crude Oil and derivatives Coffee – …
Definition: A natural monopoly occurs when the most efficient number of firms in the industry is one. A natural monopoly will typically have very high fixed costs meaning that it is impractical to have more than one firm producing the good. An example of a natural monopoly is tap water. It makes sense to have …
NEET stands for ‘Not in Employment, Education or Training’ It is used to measure social exclusion, economic inactivity and levels of disengagement from labour markets. It was created to measure levels of labour market participation amongst young people in the UK. In the UK, NEET measures the percentage of young people aged 16-24 who are …
Net investment is the total capital expenditure minus depreciation of assets. Net investment gives an indication of how much the effective productive capacity of a firm is increasing. Net investment shows how much working capital is actually increasing. Depreciation means a decline in value, for example, if a machine breaks down and is no longer …