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A markup rule is the pricing practice of a producer with market power, where a firm charges a fixed mark-up over its marginal cost. [1] [page needed] [2] [page needed]
Tobin's q [a] (or the q ratio, and Kaldor's v), is the ratio between a physical asset's market value and its replacement value. It was first introduced by Nicholas Kaldor in 1966 in his paper: Marginal Productivity and the Macro-Economic Theories of Distribution: Comment on Samuelson and Modigliani .
The index ranges from 0 to 1. A perfectly competitive firm charges P = MC, L = 0; such a firm has no market power. An oligopolist or monopolist charges P > MC, so its index is L > 0, but the extent of its markup depends on the elasticity (the price-sensitivity) of demand and strategic interaction with competing firms. The index rises to 1 if ...
The formula can be expressed: =, means monopoly price set by firms means the marginal cost of production The Lerner index measures the level of market power and monopoly power that a firm owned.The higher Lerner index indicated the more monopoly power allows a company have chance to establish prices that are higher than their marginal costs and ...
Current ratio vs. quick ratio vs. debt-to-equity Other measures of liquidity and solvency that are similar to the current ratio might be more useful, depending on the situation.
To calculate EBITDA margin requires two figures: EBITDA and total revenue. The value for EBITDA margin is calculated by dividing EBITDA (Earnings Before Interest, Taxes, Depreciation and ...
Markup is the difference between price and marginal cost. The formula states that markup as a percentage of price equals the negative (and hence the absolute value) of the inverse of the elasticity of demand. [33] A lower elasticity of demand implies a higher markup at the profit maximising equilibrium. [31]
Continue reading ->The post Quick Ratio: Definition, Formula and Usage appeared first on SmartAsset Blog. A quick ratio tests a company’s current liquidity and solvency. It is a measure of ...