This chapter has considered the nature of demand – one-half of the price-determining process of supply and demand.
New Terms:
Demand The entire relationship between the various possible prices of a product or service and the quantity demanded at each price, expressed through either a schedule or a graph.
Elastic Demand The term used to describe demand if a price increase causes a reduction in total sales revenue.
Inelastic Demand The term used to describe demand if a price increase causes an increase in total sales revenue.
Unitary Elasticity The term used to describe demand if no change in total revenue occurs as a result of a price increase.
Coefficient of Elasticity The percentage change in quantity demanded that results from a 1-percent change in price.
The Effects of Free Market on Investing If you ask me, properly determining the value of an investment is the single most important aspect of investing. Many investors may argue that diversification is most important, but diversification will not help if the majority of investments are overvalued....
Thoughts on Netflix's Pricing Changes I imagine just about any and every new website you visited this week had a story about Netflex's pricing changes. For those who might have missed it, the company is scrapping it's $9.99 plan for one DVD at a time...
Sam Zell Imparts His Wisdom One of the advantages of going to a top-tier MBA program is that you get to meet a lot of succesful, well-known people. Last week, billionaire real estate investor Sam Zell was on campus and gave an hour long speech...
TransUnion Reveals National Credit Card Debt on the Rise TransUnion.com, one of the three major credit bureaus, released the results of an analysis study of the trends in credit card lending specifically for the third quarter of 2008, revealing that credit card debt is on the rise. The report...
In this chapter we have considered the nature of the “business sector” of the economy, which produces the supply of goods and services. In Chapters 6 through 10, we will see how supply and demand interact to determine prices. This task is complicated somewhat by the fact that supply – the production of goods and services by businesses – occurs under various conditions, ranging from industries comprised of large numbers of small firms to industries dominated by a few large firms to industries in which there is only one producer (a monopoly). These different conditions – referred to as “market structures” by economists – are of great significance to the supply of goods and services. If there is only one firm in an industry (a monopoly), it is in a position to control the supply of the product, thereby raising the price of the product and increasing its profits. In industries dominated by a few large firms, it is sometimes possible for these firms to get together to avoid competing on prices and thus increase their profits. On the other hand, in industries in which there are a large number of small firms, such collective action is very difficult or impossible to achieve; as a result, competition in such industries tends to be more intense, ad profits lower, than in either of the first two cases. In Chapter 6, we will examine the concept of “demand,” then in Chapter 7, we will begin our examination of “supply” (and its interactions with “demand”) in those industries in which there are a large number of small firms – industries that economists call “competitive”.
How Relevance In Affiliate Marketing Becomes Win-Win Situation ? Affiliate marketing is one of the best online business especially for people who don't have much time to operate an Internet business. The operational cost of Affiliate marketing is widely depends on the individual and your strategies to promote a...
How Coins are Valued A coin collection can be a fascinating hobby or an investment the can increase in value over time. If you have a sizable collection or want to become a serious collector, it may be wise to get a professional assessment...
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Many schools employ student labor for various purposes, such as partime help in the athletic department. Try to draw the supply curve and the demand curve for student labor in your school, so as to estimate the equilibrium wage rate for student help. (Hints: For the supply curve, survey your friends to try to determine how many hours per week they would be willing to work at various wage rates. For the demand side, determine or estimate the school budget for student help so as to calculate how many hours of student help could be bought at various wage rates. The equilibrium price will be a wage rate, while the equilibrium quantity will be the total number of hours of work purchased by the school.)
Are You a Broke College Student? Get a Dirty Job... I Did! One of my favorite shows over the past few years has been The Discovery Channel hit series - Dirty Jobs. Mike Rowe (plus a crew of brave cameramen) pick a few disgusting and/or labor intensive jobs each week that no...
Sunday Money Roundup - Stocks and Things Welcome to this week's edition of the SMR. Browse by category for your weekend reading material. What other categories would you like to see here? Let me know - leave a comment! College | Home: Kirberts says you can be...
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Calculating Interest On Loans My father was gracious enough to use his Home Equity Line of Credit to pay my 6.8% student loan, and instead let me pay him for his variable HELOC loan, which currently sits at 2.4%. We decided that I...
Fragrancenet.com Great Gifts Under $25 FragranceNet.comFragranceNet.com was created to provide the public with access to the largest inventory of genuine, brand name fragrances, skincare, candles, aromatherapy and more at the lowest possible prices. FragranceNet.com Items at 50% Off Department Store Prices...
Online Resources For Your Credit Report Questions Credit reports can be confusing to consumers trying to take a closer look at their financial situation. If you are unsure about how to get a free copy of your credit report (hint, it's not from FreeCreditReport.com!) or if you...
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This idea is reinforced further by the fact that many directors serve on the boards of several companies, in what are called “interlocking directorships,” which tends to magnify their influence further. About one-quarter of Canadian corporate directors have significant “interlocking” connections, many of which are effected through Canada’s large and powerful chartered banks, as senior personnel from large corporations often serve on the boards of the banks and vice versa. There are different views concerning the significance of this so-called corporate business elite, with some observers feeling reassured by the stability and judgment that it provides, others seeing in it something threatening and sinister, and still others doubting whether its significance with respect to the actual operational decisions of Canada’s major corporations is as great as is often supposed.
Regardless of which of these views is the more accurate, it can be said in conclusion that large corporations play a very important role in the Canadian economy, even greater relatively to the size of the economy than in the USA, and that in these large corporations, control is often separated from ownership. Widespread small shareholders are not in a position to exercise active control. As a result, control tends to shift, depending on the circumstances, to the top management of the corporation or to the groups of influential members of the Board of Directors. Generally, neither top managers nor directors are major shareholders in their corporation; their claim to control over the corporation is based on their expertise rather than on ownership.
Separation of Church & State vs. Separation of Corporate Interests & American Politics A very thought provoking interview with Chris Whalen at King World News today on fraudclosure, mortgage backed securities, the multi-trillion dollar oopsie that is the herpes infected U.S. real estate market, and the realization that corporatism (e.g. multinational corporations effectively...
Small Business 101: Limited Liability Company (Well, it's another week here at the Amateur Financier, and that can mean only one thing: another edition of Investing Small Business 101. This time we're going to expand on some of the information you got back in the Corporations...
Challenges that Corporate Bloggers Face Corporate blogging is not the kind of thing that comes easily and generates immediate success. When it come to social media efforts like blogging, there are upsides and downsides and both must be addressed in order to adequately prepare for...
Corporate Blogging Goes Mainstream If you were one of the early adopters of corporate blogging, or if you are on the fence about whether or not it is a solid form or promotion, recent statistics show that more companies than ever are getting their...
Are you in control of your financial future? This checklist can help ensure you are in the driver’s seat.
Cash flow needs
Establish a budget to track income and expenses to uncover any potential surplus for investment.
Where you have cash flow shortfalls, review discretionary expenses and determine areas where you can cut back.
Establish an emergency fund or approximately three month’s worth of expenses. Or, establish a personal line of credit.
Take advantage of any pre-payment options on your mortgage.
Estate needs
Review your Wills and Powers of Attorney once every three years (or more frequently if appropriate) to ensure your estate will be distributed according to your wishes.
Prepare Powers of Attorney (both General and for Personal Care).
Review beneficiary designations on RRSPs, RRIFs, and life insurance policies.
Insurance needs
Review your level of life insurance coverage to ensure that your family will be taken care of in the event of your death.
Review your disability insurance – is it adequate?
Ensure that coverage for your home, dwelling, and contents reflect their true replacement value.
Retirement needs
Review and update your retirement plan to ensure that you stay on track to realizing your retirement goals.
Ten Things I think I think... (and personal finance links) It was an eventful week here are some of the top highlights: Harry Potter seemed "familiar" - I caught the final Harry Potter movie yesterday. I liked it. I came away thinking that had some Buffy the Vampire Slayer episode...
Do You Have A Marketing Budget? [/caption] How to Plan Your Marketing Budget Every business must utilize marketing to sustain itself and make revenue. Your marketing budget becomes most effective when it is planned and tracked. One of the most important planning exercises you’ll do is...
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Hybrid Electric Car Auto Insurance This post is a guest blog written by Travis Overby. With skyrocketing gas prices and the increasing concerns about the impact of carbon emissions on the environment, Hybrid Electric Cars have been growing in popularity. A hybrid electric vehicle combines...
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