Management Notes

Reference Notes for Management

Difference Between Microfinance and Microcredit – Microcredit Vs. Microfinance | Management Notes

Difference Between Microfinance and Microcredit

Difference Between Microfinance and Microcredit

What do you mean by microfinance?

Microfinance is the process of extending financial services to those people who have low income and it becomes hard for them to get finance from the banks and other private money lenders. The living standard of the poor and the people having no jobs can be improved with the financial practice of microfinance. Simply, Microfinance means the broad spectrum of financial services such as loans, insurance, savings etc. provided to the people of low-income groups.

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Benefits of E Business – 10 Advantages of E business | E Business Solutions

Benefits of E Business

Benefits of E Business

E-business is the conduct of business processes on the Internet. These electronic business processes include buying and selling products, supplies and services; servicing customers; processing payments; managing production control; collaborating with business partners; sharing information; running automated employee services; recruiting; and more.

Some of the advantages of e-business are as follows:

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Absolute Advantage Vs Comparative Advantage – Difference Between Absolute and Comparative Advantage | International Business

Absolute Advantage Vs Comparative Advantage

Absolute Advantage Vs Comparative Advantage

Absolute advantage and comparative advantage are two important concepts in international trade that largely influence how and why nations devote limited resources to the production of particular goods. They describe the basic economic benefits that countries get from trading with one another. Absolute advantage is a condition in which a country can produce particular goods at a lower cost in comparison to another country. On the other hand, comparative advantage is a condition in which a country produces particular goods at a lower opportunity cost in comparison to other countries.

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Monopolistic Advantage Theory – FDI Based Theories | International Business

Monopolistic Advantage Theory

Monopolistic Advantage Theory

Monopolistic advantage theory, first proposed by S. H. Hymer in his doctoral thesis and later expanded by C. P. Kindleberger. Monopolistic advantage theory states that the reasons multinational corporations (MNCs) are able to compete successfully against local firms. It is a microeconomic theory that makes the firm the center, as well as the cause, of the international movement of capital and goods.

The theory elucidates why firms choose to internationalize their operations. Typically, MNCs are at a disadvantage compared to local firms because they have to cope with liabilities of foreignness, lack of local know-how, high cost of acquiring this knowledge in other countries, etc.

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Law of Returns to Scale – Introduction to Microeconomics | Management Notes

Law of Returns to Scale

Law of Returns to Scale

Definition of Law of Returns to Scale

According to the law of returns to scale, output changes in proportion to input changes. The law of returns to scale states that when there is a proportionate change in input, the output also changes. Every factor of production is variable over the long term. There is no fixed factor. Thus, changing the quantity of all factors of production can change the scale of production. The distinction between fixed factors and variable factors vanishes in the long run. This means that in the long-run everything is variable.

As inputs are increased in the same proportion, the law of returns to scale describes the relationship between output and input scale in the long run. As a result of the law of returns to scale, when the amount of inputs changes proportionately, the output also changes. Changes in inputs influence output in different ways. As an example, output changes by a large, same, or small proportion based on changes in input.

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