What is the Production Function?  We can summarize the ideas so far in terms of a production function, a mathematical expression or equation that explains the engineering relationship between inputs and outputs: Q  = f  ⎡NR, L, K, t, E⎤ The production function gives the answer to the question, how much output can the firm produce given different amo...

When is Horizontal Price Fixing ? Under the Sherman Act 1, an agreement among competitors to establish a fixed price among all producers or sellers of goods or services is a horizontal restraint of trade. This type of naked restraint on trade is a purely anticompetitive and is per se illegal. Businesses may develop all sorts of arrangements to contr...

How many segments should we target? How many market segments to choose will depend a lot on the good or service that we provide.  Our options are as follows: Niche Marketing One is that we could engage in niche marketing. That is targeting one single segment that we think we can meet their needs the best. We can identify that one group that fits bes...

How Do Politics Affects Discretionary Fiscal Policy? A final problem for discretionary fiscal policy arises out of the difficulties of explaining to politicians how countercyclical fiscal policy that runs against the tide of the business cycle should work. Some politicians have a gut- level belief that when the economy and tax revenues slow down, it...

What is Accelerated Share Repurchase? An Accelerated Share Repurchase (ASR) is also known as an accelerated buyback. It is a method used by a corporation, usually a corporation that issue stocks to repurchase its stocks for specific purposes. When a corporation buys back a large number of stocks issued by them, it is called an accelerated share repu...

What is a Unit of Account? Third, money serves as a unit   of   account,  which means that it is the ruler by which we measure values. For example, an accountant may charge $100 to file your tax return. That $100 can purchase two pair of shoes at $50 a pair. Money acts as a common denominator, an accounting method that simplifies thinking about trad...

What is a Public Good? A public good, also known as a social good or collective good, is a good that is rivalrous and non-exclusive. Further, it is made available or accessible to the public for consumption or use. It is generally paid for by the public at large.  Related Topics Market Competition and Innovation New Technology and Positive Externali...

What is an Associate In Premium Auditing (APA)? The Associate in Premium Auditing refers to a professional designation that the Insurance Institute of America (IIA) awards individuals who successfully complete the required six national exams. In other words, the APA is an individual who has been granted a professional status by the IIA to perform pr...

What is a Beta Test? A Beta test is where you introduce a new product to a limited number of external customers to explore customer impressions and insights.  How is the Beta Test used? Unlike in the Alpha test, the test subjects do not have prior knowledge of the product or special expertise in the field. Think of it as a test run for the product. ...

How does U.S. unemployment insurance work? Unemployment insurance is a joint federal–state program that the federal government enacted in 1935. While the federal government sets minimum standards for the program, state governments conduct most of the administration. The funding for the program is a federal tax collected from employers. The federal g...