Markets in which firms can exit or enter without incurring
significant costs. The threat of entry causes existing firms to maintain prices close to the
level that would prevail if the number of firms were very large.
A fall in the value of one currency in terms of other currencies,
i.e., a decline in its exchange rate, under a system of floating exchange rates. It is similar
in its effects to a devaluation that denotes a lowering of the exchange rate under an
adjustable peg system.
The quantity of a good or service which an individual or group desires at the
ruling price. The total demand in an economy is referred to as aggregate demand. (see
Demand for a factor of production is sometimes called a derived
demand. This means that it is derived from the demand for the final good that the factor
co operates in producing.
A fall in the fixed (official) exchange rate between one currency and
others. When the relative values of two currencies have been fixed at an officially agreed
level, and reduction in the value of one currency against the agreed fixed level is a
devaluation. Devaluation is used to correct a balance of payments deficit but only as a
last resort as it has major repercussions on the domestic economy. For example, the price
of a country's exportable goods will fall after devaluation. However, domestic consumers
will pay higher prices for imports.
Income less tax payments or other fixed expenditures.
The practice of selling a good abroad at a price lower than that charged for the
same good in the domestic market.
Economies of scale
Reductions in the average cost of a product in the long run, resulting
from being able to produce at an optimal level (volume) of production..
Demand for goods and services which is backed up with the
resources to acquire them. This is to be distinguished from notional demand which refers
to a desire for goods and services, which is unsupported by the ability to pay and thus
cannot be communicated to suppliers through the price mechanism. Lack of effective
demand implies lack of adequate income to purchase food in the marketplace
The price of one currency in terms of another currency.
Farm gate price
The price a farmer receives for his product at the boundary of the farm
that is, the price without any transport to a market or other marketing service.
Gross marketing margin
The difference between the price received by producers and
that paid by consumers.