What Is Marginal Cost? Definition: Marginal cost is a financial metric that indicates a change in production cost on the production of an additional unit. The metric indicates the rate at which the total cost of product changes in response to changes in the production process. Because fixed cost remains the same throughout the production
What is Marginal Product? Definition: Marginal product denotes a change in output due to an additional input of production. Commonly referred to as marginal physical product, the metric measures the number of additional units that a company can produce on the addition of one unit of production. Conversely, the financial metric provides a relationship between
What Is Marginal Product of Capital? Definition: Marginal product of capital is the additional output that comes into being, in any production process, from each additional unit of capital used. It is also the incremental increase in total production arising from one unit increase in capital, as other factors of production remain constant. Understanding Marginal
What is a Company Merger? Definition: A company merger can best be described as the union between two companies in the same industry to form one corporate entity. Mergers are common in many sectors, especially competitive segments, where a merger makes sense in terms of synergies and operational efficiencies. Often mergers involve two smaller companies
What is A Market Economy? Definition: A market economy is an economic system where the laws of supply and demand influence the production of services and goods. Likewise, any economic decisions made, as well as the pricing of goods and services, depend on the interactions that businesses have with consumers. While there may be interactions
What is Market Demand? Definition: Market demand denotes the total quantity of goods and services that people are willing and able to purchase at a certain price and time. The demand, in this case, is determined by consumers’ willingness to spend on goods and services. Likewise, demand tends to have a direct impact on the
What is Minimum Variance Portfolio? Definition: Minimum variance portfolio refers to a type of portfolio structuring that focuses on minimizing risks in investment while maximizing the profit-making potential. This type of investment portfolio features individual assets that each has some level of risk. However, then are hedged when put together and this helps to achieve
What is a Master Budget? Definition: A master budget is a document that details all expected sales, production levels as well as future expenses and purchases, among other things. Departments in large organizations prepare budgets and hand them over to the finance or accounts department for consideration. Aggregation of divisional budgets gives rise to what
What Is Market Value Of Debt? Definition: Market Value of Debt refers to the price at which investors would be willing to buy a company’s debt. It also refers to the amount of debt that companies have, but not reported directly in the balance sheet hence must be calculated. The debt, in this case, encompasses
What is the Monetary Unit Assumption? Definition: The monetary unit assumption is an accounting principle or concept that suggests that the only business events and transactions that a business or company should record in its accounting books are the ones that can be measured financially. The Monetary unit assumption concept therefore assumes that anything that