Found 107 Articles for Articles / Tutorial Titles

Introduction Revenue is the total money earned by an organization within a specific period of time. Average revenue refers to the mathematical average of revenue earned per unit or individual. Average revenue provides information about the revenue earned by every unit and hence it shows the nature of revenues earned. The average revenue per unit or user (ARPU) also lets analysts forecast the future price and profitability of the products. As prices are guided by profitability, the ARPU is an indicator of unit price and per unit profit which can be used to analyze future aspects of the company. What ... Read More

Introduction The average profit method is a method of calculating the goodwill of a company. Goodwill is of immense value to a company. Although goodwill is an economic term, it is widely used in finance as a measure of extra valuation for a company, especially during its sale. The owners may take various steps to calculate the value of goodwill but all methods usually provide the same value of goodwill. What is Goodwill? Goodwill is an intangible asset. It is associated with the purchase of one company by another. The extra value of a company that remains after the net ... Read More

What is a Budget Deficit? A budget deficit is said to occur when expenditures supersede income. The word budget usually refers to government spending but it can also be applied to individuals and businesses. In other words, a budget deficit will take place if income is unable to meet the demands of expenditures. Governments usually income revenues through which they have to meet the expenses. When this revenue falls short to meet the expenses, a deficit budget occurs. A budget deficit is an undesirable outcome and entities want to avoid it generally. Types of Budget Deficits Budget deficits are of ... Read More

What is a Bank? A bank is a commercial institution that is authorized to accept checking and savings deposits and make loans. Banks also deal in services such as individual retirement accounts (IRAs), certificates of deposit (CDs), currency exchange, and safe deposit boxes. Banks use the money deposited by their customers to extend loans. The interest earned from these loans is the source of earnings for the banks. Individuals and businesses can avail of loans from banks for personal or commercial purposes. They have to pay interest to banks for availing of the loans. Types of Banks There are various ... Read More

Introduction In economics, it is important to note the relationship between price and supply. Economists want to see whether there is a direct relationship between the items sold in the market and their prices. The law of supply is a law that establishes a relationship between price and supply when all other factors are kept constant. The law of supply is an important law in microeconomics. It not only offers the relationship between price and supply but also helps in gauging the demand in the market at a given price point. As markets want to learn about the supply required ... Read More

Introduction Every business organization wants to and operates to earn money. A company won’t exist if it does not earn money for its products and services. Although all companies are not for profit, they must still earn money for their existence. When we talk about earning money from organizations, we are essentially talking about revenue. Revenue is a very important topic for businesses because the whole existence of the business depends on it. Without revenues, businesses cannot exist or keep running. Although some analysts believe that it is profit that makes sense more than revenues in a business’s operation, profit ... Read More

Introduction In our day-to-day lives, we often come across the concept of cost. We know that there is nothing free in the market. Yet to define cost in real terms we have to go through a complex process of understanding. This is so because there are many types of costs and knowing them is often an ardent task for the people who incur them. What is Cost? Cost is the required expenditure need to create and sell goods and services. Sometimes, the cost is also defined as the expenditure required to own assets. Cost is charged to expense when it ... Read More

Introduction Production is an important topic in economics as it is directly related to the well-being of societies. We can understand the health of an economy from its production values of it. Production is not only important for survival but prosperity is also brought to economies by it. Productions include variable and fixed factors and by differentiating the factors various observations can be made. The law of variable proportions is one such laws that is related to production. What is the Law of Variable Proportions? The Law of variable proportion states that when only one production element is allowed to ... Read More

Introduction In economics, it is sometimes necessary to relate input with output. In order to understand the input invested and how much of it is required to gain a certain amount of output, economists establish production functions that show the relationship between inputs and output. What is the Production Function? The production function of an organization or enterprise is an association between inputs used and the utmost amount of outputs that can be manufactured. In other words, the production function is the relationship that shows the relationship between inputs and outputs for any given amount of inputs invested and the ... Read More

Introduction Companies usually become monopolies by having access to the entire supply chain, from production to sales which is known as vertical integration. In another way, a monopoly business can buy companies to become the only significant player in the market. This is called horizontal integration. Let us see in detail about monopoly and monopolistic competition. What is a Monopoly? A monopoly is a type of market structure where one company has dominance in a sector or an industry. Monopolies are devoid of competition and hence they are not encouraged in a free market economy. Many governments enact laws to ... Read More