What is Price Skimming? Price skimming, also known as skim pricing, is a pricing strategy in which a firm charges a high initial price and then gradually lowers the price to attract more price-sensitive customers. The pricing strategy is usually used by a first mover who faces little to no competition. Price skimming is not…
What is Price Discrimination? Price discrimination refers to a pricing strategy that charges consumers different prices for identical goods or services. Different Types of Price Discrimination 1. First Degree Price Discrimination Also known as perfect price discrimination, first-degree price discrimination involves charging consumers the maximum price that they are willing to pay for a good…
What is Price Fixing? Price fixing refers to an agreement between market participants to collectively raise, lower, or stabilize prizes to control supply and demand. The practice benefits the individuals or firms involved in setting the price and hurts consumers and firms on the receiving end. Why is Price Fixing Illegal? Under Canadian and United…
What is a Shark Repellent? Shark repellent refers to measures employed by a company to lock out hostile takeover attempts. The measures may be periodic or continuous efforts exerted by management to make special amendments to its bylaws. The bylaws become active when a takeover attempt is made public to the company’s management and shareholders….
What is an Automatic Stabilizer? The term automatic stabilizer refers to a fiscal policy formulation that is designed as an immediate response to fluctuations in the economic activity of a certain country. The normal operation of the tools is such that no additional authorization is required by policymakers or the governments. The measures get automatically…
What is the Automated Customer Account Transfer Service (ACATS)? The Automated Customer Account Service (ACATS) is an electronic system in the U.S. that allows the smooth transfer of financial securities of a customer from the trading account of one institution to the trading account at another. The institutions are usually brokerage firms or banks. Many…
What is Make To Stock (MTS)? Make to Stock (MTS) is a conventional production technique wherein producers produce commodities on a large scale in accordance with anticipated consumer demand. Some of the commodities are put up on the shelves of the shop for customers to purchase, and the rest is stored as inventory. MTS production…
What is Make To Order (MTO)? Make to Order (MTO) is a production technique in which producers start manufacturing a product only after the customer places an order for it. In such a case, commodities are produced in a customized manner according to the specifications of the customer. The MTO production technique is most suitable…
What are Managed Futures? Managed futures is a subclass of alternative investment strategies used by large funds and institutional investors to achieve both portfolio and market diversification. With the ability to take both long and short positions, managed futures are diversified, highly-flexible, liquid, transparent, ideal risk management tools with the potential to profit from rising…
What is Available Balance? An account holder’s available balance is the amount of funds in their account that can be accessed immediately. It can be thought of as the quantity of funds available for withdrawal. It accounts for any funds that have been placed on deposits and pending transactions that have been authorized by the bank…
