Understanding Monopolies: Types, Characteristics, and Examples
Prices of Related Goods
Substitute Goods
The quantity demanded of a good depends on changes in the prices of related goods. If the price of one good increases, the quantity demanded of a substitute good will also increase. Substitute goods satisfy the same consumer need, such as margarine and butter, tea and coffee, or sugar and saccharin.
Complementary Goods
If the price of one good increases, the quantity demanded of a complementary good will decrease. Complementary goods are typically used together,
Read MoreInternational Financial Reporting Standards (IFRS) Key Concepts
1. Current Assets
Current assets are assets that are expected to be realized within 12 months after the balance sheet date, or are cash or cash equivalents whose use is not restricted. These assets are held for sale or consumption during the normal operating cycle of the business. All other assets should be classified as non-current.
2. Control Under IFRS
Under IFRS, a company is considered to have control over another entity when it has the power to govern the financial and operating policies of that
Read MoreValue, Exchange, and Business Structures in Market Economies
Use Value vs. Exchange Value
Use value refers to the utility of a good. Goods essential for daily life tend to command higher value. For instance, a coat’s value lies in its ability to protect against cold, making it more useful in cold climates than hot ones. An apple’s use value is determined by its taste and nutritional content.
Exchange value, or price, is the amount of money required to obtain a good in the market. It often differs from use value. Generally, exchange value is based on production
Read MoreExploring Key Economic Concepts and Principles
Economics: An Overview
What is Economics?
Economics is the science of managing scarce resources to meet human needs and generate profit. Economic activities encompass production, distribution, and consumption.
Human Needs
- Primary needs: Essential needs like food and housing.
- Secondary needs: Non-essential needs like clothing and entertainment.
Classifying Goods and Services
Goods can be tangible (e.g., clothing) or intangible (e.g., transportation). They are classified based on:
- Scarcity: Free goods are
Company Analysis: Finance, Law, and the New Economy
Company Financial Analysis
Financial analysis studies a company’s ability to meet payment obligations as they mature without disrupting normal operations. It focuses on solvency and liquidity, using the balance sheet as a foundation. This involves analyzing assets (resources that can be converted to cash) and liabilities (obligations and their maturity). The goal is to ensure enough liquid assets are available to cover debts.
Financial Equilibrium
Financial equilibrium is a company’s ability to
Read MoreKey IAS Principles and Application
IAS 1 – Presentation of Financial Statements
Objective
To establish a comprehensive framework for presenting general-use financial statements, including guidelines for structure and content.
Abstract
This standard outlines the basic principles for preparing financial statements. These include the going concern assumption, consistent presentation and classification, accrual accounting, and materiality.
- Assets, liabilities, income, and expenses cannot be offset unless permitted or required by another IFRS.