Market Structures: Competition, Monopoly, Oligopoly, Monopolistic
Perfect Competition: Market Fundamentals
Perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product (the product is a “commodity” or “homogeneous”). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices.
Key Characteristics of Perfect Competition
- Sellers: Typically small to medium-sized firms.
- Consumers: Have many different options and extensive information
GST & Customs Duty: Essential Concepts and Compliance
GST Fundamentals: Cascading Effect & Registration
Cascading Effect: Definition & Elimination by GST
Cascading effect refers to ‘tax on tax’, where a product is taxed at every stage of the supply chain without allowing credit for the tax paid at the previous stage.
Example Before GST Implementation
- A manufacturer pays excise duty on goods.
- A wholesaler buys it and pays VAT on the total price (which includes excise duty).
This resulted in double taxation.
How GST Eliminated Cascading Effect
GST is
Read MoreUnderstanding Exchange Rates and Their Impact on Global Trade
Understanding Exchange Rates
Exchange rates: The price of one currency in terms of another currency.
How Exchange Rates Affect International Trade
An increase in the exchange rate of the Euro against a foreign currency would appreciate the Euro. This makes imports cheaper but exports more expensive, potentially destabilizing the current account.
Conversely, if the Euro depreciates, exports become cheaper, potentially increasing export volume. However, imports become more expensive. This effect is influenced
Read MoreFoundations of Firm Economics: Production, Costs, and Market Structures
Firm Fundamentals: Core Economic Concepts
Key Economic Definitions
- Enterprise: An institute that hires and organizes productive resources to produce and sell goods and services.
- Opportunity Cost: The highest-value alternative forgone when making a choice.
- Explicit Costs: Direct monetary payments for resources. The amount paid could have been spent on something else.
- Implicit Costs: Costs incurred when a company forgoes an alternative action without making a direct monetary payment.
- Economic Benefit: Equal
Key Accounting Concepts: Goodwill & Depreciation
Goodwill: Partner Admission & Valuation
1. Meaning of Goodwill
Goodwill is an intangible asset that represents the value of a firm’s reputation, brand name, customer loyalty, favorable location, employee relations, and other non-physical advantages that allow it to earn higher-than-normal profits.
Read MoreDefinition:
According to the Institute of Chartered Accountants of India (ICAI),
“Goodwill is the value of the reputation of a firm which enables it to earn higher profits than the normal return on
Core Economic Principles: Markets, Development, and Global Trade
Understanding Supply and Demand
The Law of Supply and Demand is the fundamental economic model explaining the formation of market prices for assets. It is used to clarify a wide variety of macroeconomic and microeconomic phenomena and processes.
The Law of Supply states that supply is directly proportional to price: the higher the product price, the more units will be offered for sale. Conversely, the Law of Demand indicates that demand is inversely proportional to price: the higher the price, the
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