Microeconomics Principles: Utility, Costs, and Market Structures
Total Utility (TU)
The aggregate satisfaction gained from consuming successive quantities of a good or service.
Marginal Utility (MU)
The change in total utility resulting from the consumption of one extra unit of a given commodity.
Law of Diminishing Marginal Utility
As more of a good or service is consumed, the total utility will increase at a decreasing rate (i.e., marginal utility will decrease).
Optimum Purchase Rule
A consumer desiring to maximize total utility should purchase more goods and services
Read MoreBusiness Growth Strategies: Location, Size, and Internal/External Development
Unit 11: External and Internal Company Growth & Location
11.1 External Variables
- Market Demand: Analyze population interest and competition.
- Raw Material Supply: Assess quality, cost, and accessibility.
- Labor Market: Evaluate potential employees, expertise, and costs.
- Communications and Transportation: Ensure accessibility and connectivity.
- Supplies: Verify availability and cost of essential utilities.
- Building and Land Costs: Consider variations by area.
- Legislation: Understand legal, tax, mercantile,
Corporate Governance, Finance, and Strategy
Corporate Governance
Definition and Importance
Corporate governance defines how a company is managed and controlled. It involves management, the board of directors, shareholders, and other stakeholders. This system establishes rules for setting objectives, monitoring progress, and maintaining ethical conduct.
- Shareholders: Individuals who own shares in the company.
- Stakeholders: Anyone impacted by the company (e.g., customers, employees).
Importance of Ethics: Ethical corporate governance involves honesty,
Read MoreTarget Location and Commercial Function in Multinationals
Target Location
This section motivates individuals with high-level needs and is divided into three parts:
- Initial meeting between superiors and subordinates to establish goals for the upcoming period.
- Regular meetings to review progress.
- Final meeting to assess results at the end of the period.
Objectives should be quantifiable whenever possible. Subordinates are responsible for achieving established goals. If unsuccessful, they must take steps to improve in the next period.
Key Advantages:
- Motivates individuals
Company Annual Accounts: Legal Requirements and Procedures
G. – Proposal for Outcome Implementation
Along with the annual accounts and, where appropriate, management reports, administrators must propose a profit or loss allocation for consideration by the general meeting (jg).
The Limited Stock Act (LSA) mandates establishing legal reserves. A figure equal to 10% of annual profits will go to the legal reserve until it reaches at least 20% of the capital. In addition to legal reserves, statutes may require other statutory reserves. The jg, by agreement and
Read MoreCompany Financing: Internal vs. External Funding Strategies
External Funding. It consists of contributions from company members at incorporation and through subsequent capital increases. The company begins with initial partner contributions or initial capital. If these resources prove insufficient (common in growing companies), additional funding is needed to expand productive potential and invest in fixed and current assets. This funding can come from new partner contributions via a capital increase by issuing new shares. Example: A company with €200,
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