International Trade
International Trade International trade allows countries to exchange goods and services with the use of money as a medium of exchange. It should aim at a mutual gain for all participating countries. Each country can then focus on specializing in the products that they are best suited to manufacture or produce and import other goods from other trading partners who can supply them at a lower opportunity cost. A product that is sold to the global market is an export, and a product that is brought from the global market is an import. Imports and exports are accounted for in…
Read MoreUnderstanding Profit in Microeconomics
GROSS PROFIT Gross profit is the surplus which accrues to a firm when it deducts its total costs in producing products from its total income received from the sale of goods. In producing goods, a firm incurs explicit costs and implicit costs. In the ordinary language, the term profit is used in the sense of gross profit. Gross Profit = Total Revenue - Total Explicit Costs NET PROFIT Net profit is the profit which accrues to an entrepreneur for his functions as an entrepreneur. These functions include risk bearing ability, innovating spirit, bargaining ability etc. Net profit is the reward…
Read MoreProfit Maximization in Economics
TOTAL REVENUE (TR) By 'total revenue' of a firm is meant the total amount of sale proceeds or the total receipts of the firm. Total Revenue = Price x Quantity Sold TR = P.q Here: P means price, q means quantity, TR means total revenue. MARGINAL REVENUE (MR) Marginal revenue is the addition made to the total revenue by a one unit increase in the volume of sales by the firm in the market. It can also called as the net revenue earned by selling on additional unit of output. Here: TR means total revenue, q means quantity. AVERAGE REVENUE Average revenue is…
Read MoreCost Analysis
What is TOTAL COST (TC) ? Total cost is the sum of fixed cost and variable cost incurred at each level of output. Total cost of production of a firm equals its fixed cost plus its: TC = TFC + TVC Where: TC = Total cost. TFC = Total fixed cost. TVC = Total variable cost. Understanding AVERAGE FIXED COST (AFC) Average fixed cost refers to fixed cost per unit of output. Average fixed Cost is found out by dividing the total fixed cost by the corresponding output. For instance, if the total fixed cost of a shoes factory is…
Read MoreUnderstanding Law of Supply
SUPPLY Supply is of the scarce goods. It is the amount of a commodity that sellers are able and willing to offer for sale at different price per unit of time. LAW OF SUPPLY There is direct relationship between the price of a commodity and its quantity offered fore sale over a specified period of time. When the price of a goods rises, other things remaining the same, its quantity which is offered for sale increases as and price falls, the amount available for sale decreases. This relationship between price and the quantities which suppliers are prepared to offer…
Read MoreUnderstanding the Law of Demand
DEMAND Demand in economics means a desire to possess a good supported by willingness and ability to pay for it. If you have a desire to buy a certain commodity, say a car, but you do not have the adequate means to pay for it, it will simply be a wish, a desire or a want and not demand. Demand is an effective desire, i.e., a desire which is backed by willingness and ability to pay for a commodity in order to obtain it. LAW OF DEMAND Demand for a commodity is related to price per unit of time. It…
Read MoreEnterprise Integration with XML, Web Services and SOA
In most of today’s enterprises, we can observe that there are many hundreds of applications, each application being different from other application in one way or the other. Most of these applications are developed by third party. For a standard to be evolved, all these applications must be integrated for easy communication between different departments using different applications. There is a need for standardizing business applications because even well established ERP applications have not been able to provide all the functions in an enterprise. Instead of using just one application, using multiple applications will give an option of using the…
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