Term
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Definition
Equilibrium Price
- Use Value
- Variable Cost
- Resource Scarcity
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Term
| Supply Determinants of Gasoline Market |
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Definition
- Distribution Bottlenecks
- Reduced Refining Capacity
- Retail Markup in Channel
- Crude Oil Input Scarcity
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Term
| Gasoline Demand Determinants |
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Definition
- Marginal uses of gas
- purchasing power of consumer
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Term
| Determinants of Price Elasticity |
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Definition
- Number of substitutes in relevant market
- closeness of substitutes outside the relevant market (breadth of market definition)
- Period of adjustment
- adjustment and realignment costs
- information costs
- percent of budget expended on item
- stronger income superiority
- magnitude vs direction of (P,Q) change
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Term
| income elasticity of demand |
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Definition
responsiveness of a change in quatity demanded of some commodity to a change in income.
ex. Ey = 1.91 means that a 1% increase in income would result in a 1.91% increase in Q demanded |
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Term
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Definition
| measure of the responsiveness of change in Q demanded of Product A to price changes for Product B |
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Term
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Definition
- FX Transaction Risk
- FX Operating Risk
- FX Translation Risk
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Term
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Definition
| An accounting adjustment in the home currency value of foreign assets or liabilities |
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Term
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Definition
| a chance in cash flows resulting from contractual committments to pay in or receive foreign currency |
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Term
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Definition
| a chance in cash flows from foreign or domestic sales resulting from currency fluctuations |
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Term
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Definition
| Also operating hedges. Reduce operating risk exposure by matching anticipated foreign sales receipts against projected foreign operating expenses in that same currency. |
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Term
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Definition
| reduce transaction risk exposure by setting up positions in financial derivative contracts to offset cash flow losses from currency fluctuations. |
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Term
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Definition
- Economies of Scale
- volume discounts on input
- brand recognition
- word of mouth advertising
- more bargaining power with distributers
- learning curve distinction
- forecasting ability
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Term
| Why not grow market share? |
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Definition
- Lower profits
- niche markets can be widely profitable
- inevitable stretching to misfit ops for core competency
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Term
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Definition
- process choice (input mix) efficiency
- technical efficiency
- scale efficiency
(compounding) |
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