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Financial Economies:
These are benefits obtained by large firms as a result of contracting credit from financial institutions at lower interest rates than smaller firms. The fact is that the large firms can provide collateral securities for such loans and their mere sizes alone make them credit-worthy as compared to smaller firms. In addition to borrowing from financial institutions, large firms can easily float shares in the stock market. At times suppliers of materials to large firms may give them out on credit. This is a sort of pre-financing of the firm’s activity. All these advantages lead to the lower per unit cost of output produced.
Gross Domestic Product, Deflator: A price index that adjusts the overall value of GDP according to average increase in the prices of all output. GDP deflator equals the ratio of no
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elasticity of demand
1. Sam Smith owns an internet radio company that has subscribers in Houston and Dallas. The demand functions for the 2 markets are: Q(Houston) = 50-0.35P(Dallas) Q(Dallas) = 80-0.
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Slutsky's Theorem: Graphical Presentation We prove here that own price effect is the sum of own substitution effect and income effect for a price change, which is known
Depreciation T ax Shield The decrease in corporate income taxes suitable to the deductibility of depreciation from the firm's taxable earnings. Although depreciat
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