Economics

Retrenchment

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Definition of Retrenchment Retrenchment in business occurs when they cut down or reduce something to become more financially stable. When does a business use retrenchment? Retrenchment could occur during a recession It could occur when a company is going through financial difficulty The impact of an economic shock to the economy such as the coronavirus […]
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Retrenchment
Tradable Pollution Permits

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What are tradable pollution permits? Tradable pollution permits is a system created to encourage firms to reduce their overall pollution levels. It is a cap and trade system allowing firms to sell any unused permits and buy extra permits from other firms or governments. ETS – Emissions Trading System In 2005 the European Commission set […]
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Tradable Pollution Permits
Natural Monopoly

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Natural Monopoly What is a Natural Monopoly A Natural Monopoly occurs where the industry can only support one firm. Characteristics of Natural Monopolies High start-up costs High fixed costs High barriers to entry Unique product or service The industry can only support one firm Examples of Natural Monopoly An example of a Natural Monopoly would […]
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Natural Monopoly
Market Capitalisation

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Market Capitalisation This is the total market value of all of a company’s outstanding shares. Market capitalisation is calculated by multiplying a company’s outstanding shares by the current market price of one share. This figure is used to determine a company’s size.
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Market Capitalisation