Explain how price serve as a signal to resource owners, Financial Management

Assignment Help:

How does price serve as a signal to resource owners?

While consumers decide that a good or service is much more appealing than before, demand rises.  This makes a shortage at the original equilibrium price, putting upward pressure on price.  The higher price raises the amount of profit firms can earn, and provides them along with an incentive to produce more.  So, resource prices are bid up to attract much more resources to the firms.  The end result is a movement of resources into the industry.


Related Discussions:- Explain how price serve as a signal to resource owners

Bureaucratic management, nestle is an orgnization wether bureacratic approa...

nestle is an orgnization wether bureacratic approach approperiate for the organizational performance or not?

Venture Capital, Difference between venture capital and conventional financ...

Difference between venture capital and conventional financing

Market versus capital market, For what kinds of needs do you think a firm w...

For what kinds of needs do you think a firm would issue securities in the money market versus the capital market?

Explain terminal value calculation at end of forecast period, Explain the t...

Explain the terminal value calculation at the end of the forecast period.  Why is it necessary? The organization whose business operation is being valued is not supposed to sudde

Explain about interest rate management, Interest rate caps as well as colla...

Interest rate caps as well as collars are available on the over the counter (OTC) market or may be devised using market based interest rate options. They may be utilize to hedge cu

Stable money measurement, Stable Money Measurement A business entity e...

Stable Money Measurement A business entity enters within numerous transactions in which affect the business in varied ways.  Therefore recording, classification and summarizat

Explain present value of a series of cash flows, Q. Explain Present Value o...

Q. Explain Present Value of a Series of Cash Flows? Present Value of a Series of Cash Flows: - In a business circumstances it is very natural that returns received by a firm ar

91-day t-bills, 91-Day T-Bills Starting from July, 1965, 91-day T-bills...

91-Day T-Bills Starting from July, 1965, 91-day T-bills were issued at a discount rate ranging from 2.5-4.6 percent per annum. Till July, 1974, the discount rate was 4.6 percen

Explain and compare the costs of hedging, Explain and compare the costs of ...

Explain and compare the costs of hedging via the forward contract and the options contract. Answer: There is no up-front cost of hedging through forward contracts. Though, in t

Cash budget, stauffer , inc., has estimated sale and purchase requirments f...

stauffer , inc., has estimated sale and purchase requirments for the last half of coming year. parepare cash budget for the month of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd