Archives: Terms

Definition of Concentration Ratio The concentration ratio, in the context of economics, refers to the percentage of the market’s total output that is produced by the largest firms within the industry. It is often used to measure the degree of market concentration and to assess the competitive landscape of an […]

Definition of Computational Economics Computational economics is a discipline within economics that uses computational methods and techniques to model and solve complex economic problems. It integrates computer science, economic theory, and mathematical models to analyze, simulate, and forecast economic phenomena. This field leverages the power of computers to deal with […]

Definition of Computable General Equilibrium (CGE) Models Computable General Equilibrium (CGE) models are a class of economic models that use actual economic data to estimate how an economy might react to changes in policy, technology, or other external factors. CGE models are characterised by their ability to account for the […]

Definition of Compound Interest Compound interest is a financial concept that denotes the process of generating earnings on an investment’s earnings. In simpler terms, it is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. This concept […]

Definition of Complex Multiplier The concept of the complex multiplier pertains to macroeconomics and is an extension of the simple Keynesian multiplier. It suggests that the total increase in output (or income) resulting from an initial injection of spending is greater than the initial amount spent, taking into account multiple […]

Definition of Complementary Goods Complementary goods refer to products or services that are often used together because the consumption of one enhances the use or value of the other. Essentially, these goods have a positive cross-elasticity of demand; meaning, if the price of one good goes down, the demand for […]

Definition of Competition Law Competition law, also known as antitrust law in the United States, consists of laws and regulations designed to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy. These laws restrict the formation of monopolies, cartels, and other alliances that […]

Definition of Competition Competition in economics refers to the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. It is the driving force behind innovation, efficiency, and improvement in products […]

Definition of Collective Action Problem A collective action problem arises when a group of individuals have common interests or goals but struggle to work together to achieve them due to conflicting individual interests or incentives that discourage joint action. This discrepancy between collective and individual interests can lead to outcomes […]

Definition of Collective Action Collective action refers to any form of action taken together by a group of people with the aim of achieving a common objective. It encompasses a wide range of activities and mechanisms, including but not limited to protests, strikes, social movements, and community initiatives. The theory […]