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Cost Pass-through
In economics, cost pass-through (also known as price transmission or simply ''pass-through'') is a process (or result) of a business changing pricing of its output (products or services) to reflect a change in costs of its own input (materials, labor, etc.). The effect of passthrough is quantified as passthrough rate, a ratio between the change in costs and the change in prices. Depending on circumstances, a business might choose to absorb part of the cost changes (resulting in ratio below 1.0) or amplify them (ratio above 1.0). Cost pass-through is extensively used when analyzing the state of competition or evaluating mergers. In the studies of inflation, an opposite direction pass-through from prices to wages is also considered, as well as both occurring together ( wage-price spiral). Simple examples When an increase in costs (the ''cost shock'') happens in a perfectly competitive market, a bigger share of the change will be borne by the party that is less sensitive to the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Cost
In economics, the marginal cost is the change in the total cost that arises when the quantity produced is increased, i.e. the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount. As Figure 1 shows, the marginal cost is measured in dollars per unit, whereas total cost is in dollars, and the marginal cost is the slope of the total cost, the rate at which it increases with output. Marginal cost is different from average cost, which is the total cost divided by the number of units produced. At each level of production and time period being considered, marginal cost includes all costs that vary with the level of production, whereas costs that do not vary with production are fixed. For example, the marginal cost of producing an automobile will include the costs of labor and parts needed for the additional automobile but not t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Government Of The UK
His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central executive authority of the United Kingdom of Great Britain and Northern Ireland.Overview of the UK system of government : Directgov – Government, citizens and rights Archived direct.gov.uk webpage. Retrieved on 29 August 2014. The government is led by the ( |
Markup (business)
Markup (or price spread) is the difference between the selling price of a good or service and its marginal cost. In economics, markups are the most direct way to measure market power: the extent to which a firm can influence the price at which it sells a product or service. Markup is often expressed as a percentage over the cost. A markup is added into the total cost incurred by the producer of a good or service in order to cover the costs of doing business and create a profit. The total cost reflects the total amount of both fixed and variable expenses to produce and distribute a product. Markup can be expressed as the fixed amount or as a percentage of the total cost or selling price. Retail markup is commonly calculated as the difference between wholesale price and retail price, as a percentage of wholesale. Other methods are also used. Markdowns refer to the ability of a firm to hold the price it pays for an input below the input's marginal product. Price determina ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Structural Estimation
Structural estimation is a technique for estimating deep "structural" parameters of theoretical economic models. The term is inherited from the simultaneous equations model. Structural estimation is extensively using the equations from the economics theory, and in this sense is contrasted with "reduced form estimation" and other nonstructural estimations that study the statistical relationships between the observed variables while utilizing the economics theory very lightly (mostly to distinguish between the exogenous and endogenous variables, so called "descriptive models"). The idea of combining statistical and economic models dates to mid-20th century and work of the Cowles Commission. The difference between a structural parameter and a reduced-form parameter was formalized in the work of the Cowles Foundation. A structural parameter is also said to be "policy invariant" whereas the value of reduced-form parameter can depend on exogenously determined parameters set by public ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Methodology Of Econometrics
The methodology of econometrics is the study of the range of differing approaches to undertaking econometric analysis. The econometric approaches can be broadly classified into nonstructural and structural. The nonstructural models are based primarily on statistics (although not necessarily on formal statistical models), their reliance on economics is limited (usually the economic models are used only to distinguish the inputs (observable "explanatory" or " exogenous" variables, sometimes designated as ) and outputs (observable "endogenous" variables, ). Nonstructural methods have a long history (cf. Ernst Engel, 1857). Structural models use mathematical equations derived from economic models and thus the statistical analysis can estimate also ''unobservable'' variables, like elasticity of demand. Structural models allow to perform calculations for the situations that are not covered in the data being analyzed, so called counterfactual analysis (for example, the analysis of a monop ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Econometric
Econometrics is an application of statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics", '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8–22 Reprinted in J. Eatwell ''et al.'', eds. (1990). ''Econometrics: The New Palgrave''p. 1 p. 1–34Abstract ( 2008 revision by J. Geweke, J. Horowitz, and H. P. Pesaran). More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference." An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships." Jan Tinbergen is one of the two founding fathers of econometrics. The other, Ragnar Frisch, also coined the term in the sense in which it is used today. A basic tool for econometrics is the multiple linear regression model. ''Econometr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Demand Curve
A demand curve is a graph depicting the inverse demand function, a relationship between the price of a certain commodity (the ''y''-axis) and the quantity of that commodity that is demanded at that price (the ''x''-axis). Demand curves can be used either for the price-quantity relationship for an individual consumer (an individual demand curve), or for all consumers in a particular market (a market demand curve). It is generally assumed that demand curves slope down, as shown in the adjacent image. This is because of the law of demand: for most goods, the quantity demanded falls if the price rises. Certain unusual situations do not follow this law. These include Veblen goods, Giffen goods, and speculative bubbles where buyers are attracted to a commodity if its price rises. Demand curves are used to estimate behaviour in competitive markets and are often combined with supply curves to find the equilibrium price (the price at which sellers together are willing to sell the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equilibrium Price
In economics, economic equilibrium is a situation in which the economic forces of supply and demand are balanced, meaning that economic variables will no longer change. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes, and quantity is called the "competitive quantity" or market clearing quantity. Understanding economic equilibrium An economic equilibrium is a situation when the economic agent cannot change the situation by adopting any strategy. The concept has been borrowed from the physical sciences. Take a system where physical forces are balanced for instance.This economically interpreted means no further change ensues. Properties of equilibrium Three basic properti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Oligopolistic Market
An oligopoly () is a market in which pricing control lies in the hands of a few sellers. As a result of their significant market power, firms in oligopolistic markets can influence prices through manipulating the supply function. Firms in an oligopoly are mutually interdependent, as any action by one firm is expected to affect other firms in the market and evoke a reaction or consequential action. As a result, firms in oligopolistic markets often resort to collusion as means of maximising profits. Nonetheless, in the presence of fierce competition among market participants, oligopolies may develop without collusion. This is a situation similar to perfect competition, where oligopolists have their own market structure. In this situation, each company in the oligopoly has a large share in the industry and plays a pivotal, unique role. Many jurisdictions deem collusion to be illegal as it violates competition laws and is regarded as anti-competition behaviour. The EU competiti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
