2013). b.) The Average Cost (AC) - The average cost is the total cost divided by the number of units produced. Average cost curve – The graphical representation of average cost. Diagram: Average cost curve. The AC curve is U-shaped. This is because the ATC is made up of AVC‚ which is increasing‚ and AFC‚ which are decreasing. At low production quantities the decline in AFC dominates‚ but eventually the increasing AVC overwhelms the average costs. c.)The Average Fixed Cost (AFC) - A
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that past patterns in data can be used to forecast future data points. 1. Moving averages (simple moving average‚ weighted moving average): forecast is based on arithmetic average of a given number of past data points 2. Exponential smoothing (single exponential smoothing‚ double exponential smoothing) - a type of weighted moving average that allows inclusion of trends‚ etc. 3. Mathematical models (trend lines‚ log-linear
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Notes Factors affecting demand: * Price of Substitutes- An increase in the price of a good’s substitute will increase demand for the good. * Price of Complements- An increase in the price of a good’s complement will decrease demand for the good. * Consumers’ Income- A rise in income increases the demand for normal goods and decreases the demand for inferior goods. * Consumers’ Expectations- If consumers expect a product’s quality to increase in the near future‚ they will have a lower
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Accounting Estimate • Accounting estimate – An approximation of a monetary amount in the absence of a precise means of measurement. This term is used for an amount measured at fair value where there is estimation uncertainty‚ as well as for other amounts that require estimation. PSA 540 9 The auditor shall review the outcome of accounting estimates included the prior period financial statements‚ or‚ where applicable‚ their subsequent re-estimation for the purpose of the current period. The nature
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Case #3 “Marriott Corporation” The Cost of Capital” What is the weighted average cost of capital for the Marriott Corporation and cost of capital for each of its divisions? – What risk-free rate and risk premium did you use to calculate the cost of equity? – How did you measure the cost of debt? – How did you measure the beta for each division? Solution What risk-free rate and risk premium did you use to calculate the cost of equity? – Risk-free rate proxy The risk-free
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Capital (K) Labor (L) Total Product (TP) Average Product (AP) Marginal Product (MP) 10 10 10 10 10 10 10 10 10 10 10 0 1 2 3 4 5 6 7 8 9 10 0 5 15 30 50 75 85 90 92 92 90 - - a. From the information in the table‚ calculate marginal and average products. b. Graph the three functions (put total product on one graph and marginal and average products on another). c. For what range of output does this function have diminishing marginal returns? d. At what output is average product maximized? Technical Question
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result in a long-run total cost curve that lies above the initial long-run total cost curve at every quantity except Q = 0 . Since AC = TC / Q ‚ increasing total cost will raise average cost at every quantity except Q = 0 . Therefore‚ the long-run average cost curve will shift up. 2. 3. 5. a) When MC > AC ‚ average cost is increasing‚ and
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from “dis-economies of scale”? What are the types of economies of scale? How this concept is reflected in the long run average cost curve (LRAC)? (20marks) a. Economies of scale- are for small levels of production of firms‚ when the average costs of output decline as output increases. b. Dis-economies of scale- are for the relatively large levels of production that occur when average costs of output rise as output increases. Types of economies of scale
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Altavox Excel Data (1) Week 1 2 3 4 5 6 7 8 9 10 11 12 13 Average Atlanta 33 45 37 38 55 30 18 58 47 37 23 55 40 40 Boston 26 35 41 40 46 48 55 18 62 44 30 45 50 42 Chicago 44 34 22 55 48 72 62 28 27 95 35 45 47 47 Dallas 27 42 35 40 51 64 70 65 55 43 38 47 42 48 Los Angles 32 43 54 40 46 74 40 35 45 38 48 56 50 46 Total 162 199 189 213 246 288 245 204 236 257 174 248 229 222 Altavox Data (2) Week -5 -4 -3 -2 -1 Atlanta 45 38 30 58 37 Boston 62 18 48 40 35 Chicago 62 22 72 44 48
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The following data represent total personnel expenses for the Palmdale Human Service Agency for past four fiscal years: 20X1 $5‚250‚000 20X2 $5‚500‚000 20X3 $6‚000‚000 20X4 $6‚750‚000 Moving Averages 20X2-X4 $18‚250‚000 / 3 = $6‚083‚333 Weighted Moving Averages Fiscal Year Expenses Weight Weighted Score 20X2 $5‚500‚000 1 $5‚500‚000 20X3 $6‚000‚000 2 $12‚000‚000 20X4 $6‚750‚000 3 $20‚250‚000 __ ___________ 6 $37‚750‚000 20X5 $37
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