fixed cost. Cost that does not change with a change in the amount of products or services sold.
mitigation. Action taken by the plaintiff to minimize the economic effect of the harmful act. Also often refers to the actual level of earnings achieved by the plaintiff after the harmful act.
nominal interest rate. Interest rate quoted in ordinary dollars, without adjustment for inflation. Interest rates quoted in markets and reported in the financial press are always nominal interest rates.
prejudgment interest. Interest on losses occurring before trial.
present value. Value today of money due in the past (with interest) or in the future (with discounting).
price erosion. Effect of the harmful act on the price charged by the plaintiff. When the harmful act is wrongful competition, as in intellectual property infringement, price erosion is one of the ways that the plaintiff’s earnings have been harmed.
real interest rate. Interest rate adjusted for inflation. The real interest rate is the nominal interest rate less the annual rate of inflation.
regression analysis. Statistical technique for inferring stable relationships among quantities. For example, regression analysis may be used to determine how costs typically vary when sales rise or fall.
reliance damages. Damages designed to reimburse a party for expenses incurred from reliance upon the promises of the other party.
restitution damages. Damages measured on the principle of restoring the economic equivalent of lost property or value.
variable cost. Component of a business’s cost that would have been higher if the business had enjoyed higher sales. See also avoided cost.