aware of at least the basics of financial plans which are revenue‚ cost and profit. These three things can make or break a company. Each of these things must be understood and considered before plans can be laid to create or better a company. Revenue is the amount a company receives (Marginal Revenue‚ 2009). If a company is in the business of sales‚ revenue is the amount of money the company receives per unit sold. Marginal revenue is the amount of money a company receives for the last unit
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Economics Luis D. Maymí Romero University of Phoenix ECO/212 Prof. Mayra Malpica Rivera April 27‚ 2015 Economics There are four principals of decision making: People face trade-off The cost of something is what you give up to get it Rational people think at the margin People respond to incentives The first principle can be summarized with the following phrase “There’s never a free lunch” every time that you need something you have to give something in return. One example is an employee that needs
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2009 TOPIC 7: ABSORPTION AND MARGINAL COSTING Outline: 1. Learning Objectives 2. Differences between absorption and variable costing 3. Impact on profit under each costing technique 1. Learning objectives a. Explaining the differences between absorption costing and marginal costing b. Explaining the impact on stock valuation & profit under each costing system c. Explaining the impact on under each costing system d. Preparing multi-period absorption and marginal costing profit statements 2. Explaining
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price affects on revenue of any movement along a demand curve. Find the profit maximizing quantity and price of a single-price monopolist. Compute deadweight loss from a single-price monopolist. Compute marginal revenue. Define the efficiency of P = MC. Find the profit-maximizing quantity and price of a perfect-price-discriminating monopolist. Find the profit-maximizing quantity and price of an imperfect-price-discriminating monopolist. Question: Each of the following firms possesses market
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Relationship between marginal cost and marginal product. Marginal cost is the additional cost attributed to an additional unit produced. Marginal product is the increase in the total product due to an additional resource allocation. The marginal cost and marginal return have an inverse relationship and can almost be represented as mirror images of each other. The peak of the marginal product corresponds with the lowest point of the marginal cost. Thus as marginal product increases
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how scarcity‚ choice and opportunity cost are relevant when choosing amongst alternatives? 2. Define the concept of “opportunity cost” and discuss various examples. 3. Explain how the concept of opportunity cost may be used to explain the following: a) Why very few petrol stations are found in the centre of large cities. b) Why it might be worthwhile for a company to contract out work even though contracting out may involve a higher monetary cost. c) Why tourists pay higher prices
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that the price elasticity of demand for U.S. manufactured automobiles is -1.2‚ while the income elasticity of demand is 2.0 and the cross price elasticity of demand with respect to the foreign automobiles is 1.5. The current volume of sales for U. S. manufactured automobiles is 10 million per year. It is expected that over the next year the average income of the consumers in the U.S. will increase by 2.5 percent. It has been determined that the price of the foreign imports will increase by 6%
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for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50. a. Given the above information‚ what is this monopolist’s profit maximizing price and output if it charges a single price? Answer: MR = 520 – 4Q MC = 100 + 2Q 520 – 4Q = 100 + 2Q Q = 70 units of output P = 520 – 2Q = 520 – 2(70) = $380 per unit of output b. Given the above information‚ calculate this single price
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___________________________________________________________________________ 1. A Ch3 Student: firm will maximize profit by producing that level of output at which A. the additional revenue from the last unit sold exceeds the additional cost of the last unit by the largest amount. B. the additional revenue from the last unit sold equals the additional cost of the last unit. C. total revenue exceeds total cost by the largest amount. D. total revenue equals total cost. E. both b and c 2. The function a decision maker seeks to maximize
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average variable cost is a. at the same level of output as the minimum average total cost b. at a smaller level of output than the minimum average total cost c. at a larger level of output than the minimum average total cost d. at the same level of output as the average fixed costs e. same as minimum marginal cost 2. The multiplant monopolist maximises profits when a. Marginal cost equals marginal revenue b. When marginal cost in each plant are equal c. When average cost in each plant
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