Tag: prices and cost of living

A key factor is defined as the factor in the activities of an undertaking which, at a particular point of time or over a period, will limit the volume of output. Other variant terms are limiting factor, Principal Budget Factor & scarce factor. Limiting factors are governed by both internal & external factors. It may be actual or potential. If a factor of production is in short supply, then the best-paying product becomes that which yields the highest contribution per unit of limiting factor.

Budgeting is usually done for short, mid-range, longer term time periods. A month, a quarter and a month are usually observed budget periods. However, budget period can vary with each entity. A family might do budgeting every month. In this case, budget period is of one month. Generally, a government has a budget period of 12 months. Determining the budget period is the first step in the budgeting process. Budget period can have intermediate control periods over which comparisons are made between budgeted and actual results.

A business may need to revise a budget continuously for the length of time it takes to complete a short-term project. If a business undertakes an expansion that requires three years to complete, it may need recurrent budget revisions during this time to meet short-term goals. Afterwards, the company may go back to a more fixed budget with long-term goals. In addition, a company that introduces a new product may need to continually revise the budget until actual figures for production costs and sales income is substantiated.

A company requires a particular budget that details categories of revenue and expenditures relevant to the particular business enterprise. Although most companies create budgets for a one-year period, ongoing evaluations regularly give the business more leeway in making adjustments as needed. Businesses utilize a budget revision process to trim excess spending, re-allocate revenues and make allowances for unexpected or uncommon expenses.

Power of commodity which can command to exchange itself with the other good is called the Value of product. It refers to the importance of a commodity due to its usefulness. Usually a product is valued by the money. Capacity of a commodity to command or obtain other goods in exchange is called value of exchange.

Power of commodity which can command to exchange itself with the other good is called the Value of product. Usually a product is valued by the money. 

Power of commodity which can command to exchange itself with the other good is called the Value of product. Usually a product is valued by the money. And this money with which a product is valued is called its price.

Average revenue refers to the revenue per unit of output sold. It is obtained by dividing the total revenue by the number of units. AR is equal to per unit sale receipts and price is always per unit. Since sellers receive revenue according to the price, price and AR are one and the same thing.

TR= Quantity * Price

AR= TR/ Quantity

AR= (Quantity * price)/ quantity

AR= Price