What is a Marginal Benefit? Definition: Marginal benefit is the benefit that consumers enjoy for paying for an additional good or service. Often referred to as marginal utility, the term also denotes the additional satisfaction that comes into play when consumers receive an additional good or service. Therefore, the measure describes the level of satisfaction
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 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 Net Capital Spending? Definition: Net capital spending is the amount of money that a firm uses to acquire fixed assets in a given accounting period. Companies in a phase of rapid growth or in an expansion drive tend to spend more on fixed assets, in a bid to accelerate the production or the
What are Net Exports? Definition: Net Export is a financial metric that measures a country’s net economic trade with other countries. In its purest form, it is the difference between the value of goods exported and imported. Depending on whether a country imports or exports more, the value can be positive or negative. Net Export
What is the Nominal GDP? Definition: Nominal GDP (Gross Domestic Product) denotes the value of all goods and services produced in a year in a country. The financial measure is calculated using current market prices and expressed in monetary terms. The financial metric acts as an assessment of the economic production of an economy as
What is Perfectly Elastic Demand? Definition: A perfectly elastic demand is an economic situation where there is a direct relation between the supply or demand and pricing. In this case, a slight change in price will often result in a significant change in demand. For instance, a small price increment might cause demand for products