ABSORBED COSTS Definition

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ABSORBED COSTS incorporates both variable and fixed costs.

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COMPETITIVE PRICING generally is where firms must be able to offer the best price in the market and meet price erosion without compromising quality. This is normally met whenever a firm finds acceptable a prices-production combination such that: a. At these prices, there is no other production plan yielding higher profits and using fewer capital goods; namely, firms behave as constrained profit maximizers at given prices; and, b. There is no price vector satisfying "a." with higher prices for capital goods. In other words, the prices of capital goods are maximal within those satisfying constrained profit maximization

SELLING SHORT is selling securities not yet owned by the seller in anticipation of declining market prices. At some point in the future, the seller covers the sale by purchas­ing and delivering the securities.

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