"Marginal Cost" Essays and Research Papers

Marginal Cost

business and how the new equipment will help the business to function and the cost of the product will determine what the managers of the business decides.   Marginal costs are change in total costs divided by change in output. Marginal revenue is the change in total revenue divided by change in output. Increase in fixed costs means that when the fixed costs cannot be changed it is the short run and when the fixed costs change it is the long run. The second questions that I chose to answer was...

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Marginal Cost

particular function, dy/dx = 4x - 3. If it is known that when x = 1, y = 5, find y in terms of x. 6. A manufacturing process costs RM 6500 to set up for one year’s use. If items cost RM 85 each to produce and other costs amount to 3.5 x2, where x is the production in hundreds, find the level of production that will minimise the cost per item over the year. What will the total cost amount to at this level of production? 7. The marketing department of Spager Ltd estimated that if the selling price of...

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sociology

nonexistent. the marginal cost curve above minimum average variable cost. Question A monopolist maximizes total revenue when its marginal revenue is ________. Answer positive zero negative equal to price Question For a monopolist, price Answer equals marginal revenue. is less than marginal revenue. is greater than marginal revenue. can be greater than or less than marginal revenue. Question When the demand curve is a downward sloping straight line, the slope of the marginal revenue...

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Marginal Cost and Revenue Marginal Revenue

3.05 Marginal Cost Analysis Name:______________________________________________ Step One: Launch the data generator to get started (located in the last page of the lesson, or use the numbers given below: Quantity Price (in whole dollars) Total Revenue Marginal Revenue Total Cost Marginal Cost Profit (or loss) 0 42 0   35     1 41 41   68     2 40 80   94     3 39 117   107     4 38 152   114     5 37 185   129     6 36 216   180     7 35 245   235     8 34 272   296     Step Two: Determine a product...

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Week 4 Assignment Xeco212

total revenue minus total cost” (Mankiw, 292). Total revenue is calculated by multiplying price by quantity. Output is determined in a competitive market in terms of maximizing profits by following three general rules: “If marginal revenue is greater than marginal cost, the firm should increase its output, if marginal cost is greater than marginal revenue, the firm should decrease its output, and at the profit-maximizing level of output, marginal revenue and marginal cost are exactly equal” (Mankiw...

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Maximizing Profits in Market Structures

maximizing, the price of a good equals the marginal cost of making that good” (p. 306). If the seller charges less than the market price, they may sell more. If they raise the cost, they risk losing customers. The output in a competitive market is determined by what will make them have the largest profit. Firms figure this out be comparing the marginal revenue and marginal cost of each unit they produce. When marginal revenue is greater than the marginal cost, the output should be increased so the firm...

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Ib Work

likely true? f. The marginal benefit of the fourth hour is certainly less than the marginal cost of the fourth hour. g. The marginal benefit of the fourth hour is at least as great as the marginal cost of the fourth hour. h. Without knowing the student's opportunity cost of studying, we have no way of knowing whether or not her marginal benefits outweigh her marginal costs. i. The marginal cost of the third hour was likely greater than the marginal cost of the fourth hour. ...

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Microeconomic Theory Problem Set: Answer Key

by the intersection of the firm’s marginal cost and the market demand curve). As usual, the monopoly determines its optimal output on the basis of MR = MC. Here, however, it cannot charge a price in excess of p*. So, for any output less than Q(p*) (where Q(p) is the demand function) its marginal revenue is p*. On the graph below that gives: pm p* MR MC Demand q m q * 2) The inverse demand curve a monopoly faces is p=10Q-1/2. The firm’s cost curve is c(Q) = 10 + 5Q. Find the...

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Monopoly

give rms the exclusive right to produce a product for 20 years. 3. Natural Monopoly: a monopoly that arises because a single rm can supply a good or service to an entire market at a smaller cost than could two or more rms. A natural monopoly occurs when there are economies of scale, implying that average total cost falls as the rm's scale becomes larger. Monopoly versus Competition The key di erence between a competitive rm and a monopoly is the monopoly's ability to control price. The demand curves...

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Public Goods Are Non-Rival Consumption Goods and Non-Excludable Goods

variable. In case of Non Rival goods the marginal cost of an additional consumer is zero. Hence efficient price for using an existing non-rival good is zero because a positive price reduces use and hence benefits without reducing costs. Market efficiency requires that the marginal cost of providing an additional good or service must be equal to the sum of marginal benefits of all individuals. If market allocates the good it will be sold at a price. However, marginal cost of non rival good is zero and price...

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Free Market Is the Most Efficient

prices, Product prices are determined by the market demand and supply conditions of the particular goods/services. Moreover How to produce will depend on the factor prices, where firms will adopt its least costly method to maximise revenue by minimising cost. In addition, the decision for Whom to produce, will depend on both factor and product prices, as the price mechanism rations out the good produced according to the consumers’ willingness and ability to pay. Economic Efficiency is...

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Maximizing Profits in Market Structures Paper

calculating the marginal revenue based on the quantity and the marginal cost. If the marginal revenue is higher than the marginal cost then the firm can set the price based on those numbers. If the marginal cost outweighs the marginal Maximizing Profits 3 revenue, then the firm begins to lose money. The firm is looking for the right number that will maximize profits by having a higher revenue than cost. The firm maximizes profits based on output by determining the balance between marginal cost...

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Managerial Economics Chapter 9

because The marginal revenue curve for a perfectly competitive firm is the same as its demand curve. Perfectly competitive firms should produce the quantity where The difference between total revenue and total cost is as large as possible. Profit for a perfectly competitive firm can be expressed as (P-ATC) x Q , where P is price, Q is output, and ATC is average total cost. A student argues: “To maximize profit, a firm should produce the quantity where the difference between marginal revenue...

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Problem Set 6 Answers

2P. The monopolist’s total cost function is TC = 5+8Q2. What is the monopolist’s profit-maximizing level of output and price? Answer Step 1. Derive the MR and MC functions. Since Q = 100 - 2P, P = 50 – (Q/2) TR=P*Q=(50-1/2Q)Q=50Q-1/2Q2 MR=dTR/dQ=50-Q MC=dTC/dQ=16Q Step 2. Set MR=MC and solve for P*, Q* MR=MC 50-Q=16Q Q*=2.94 or 3 (rounded) P*=50-1/2Q*=50-1/2*3=48.5 2. Assume a monopolist faces a market demand curve P = 130 – 2Q, and has the short-run total cost function TC = 350 + 10Q. ...

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Maximizing Profits in Market Structure

rules…: 1. If marginal revenue is greater than marginal cost, the firm should increase its output. 2. If marginal cost is greater than marginal revenue, the firm should decrease its output. 3. At the profit-maximizing level of output, marginal revenue and marginal cost are exactly the same” (Mankiw, 2007, p. 295). At first perusal, this may seem like a convoluted system, but it does help to achieve an economic balance. Simply stated this means the least amount of the entire cost of a good is...

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Monopoly and Marginal Cost

market power.  Apply the quantity and 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...

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Eco561 R9 Business Proposal Feedback Ch

price and costs, and also providing healthy food in the vending machines. Chosen methods to determine profit-maximizing quantity      SD D N A SA   Yes No Strategies for placing vending machines and determining prices in a way that would attract consumers were included in the paper. Use of concepts of marginal cost and marginal revenue to maximize profit      SD D N A SA   Yes No The concept and affect on Marginal cost and revenue...

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Monopoly and Fair Return

number of years and it’s understandable that a monopoly would want to restrict the usage of their research and hard work. Similarly if the price slashes are pushing out competition, they are at the same team encouraging competitors to reduce their costs/price which is great for the consumers and the market in general. Question 3: How does the demand curve faced by a purely monopolistic seller differ from that confronting a purely competitive firm? Why does it differ? The demand curve of a purely...

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Supply and Demand and Question

producers? Question # 08: What will happen to the total revenue of the producer with price increase, if (i) (ii) Ep > 1 , Ep < 1 , (iii) Ep = 1 . 1 . Ep Question # 09: The relation between marginal revenue and price elasticity is MR = 1 − Diagrammatically explain that what will be the value of marginal revenue, if (i) Ep > 1 , (ii) Ep < 1 , (iii) Ep = 1 . Question # 10: How could u interpret the results of income elasticity and cross price elasticity as an economist? What sort of information...

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Economics Internal Assessment

firms enter) and the demand curve shifts to the left. If no one is watching the movies, firms loose money and the demand curve shifts to the right. Due to these shifts, zero profit equilibrium occurs, as shown above, where price equals average total cost. In movies today, and always, companies have made deals with movies in order to be included in a film. This is all part of marketing, as for example; companies think that if Brad Pitt is eating a Twix in a movie, the movie watchers are more...

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student/teacher

from ‘hidden action’, Public Goods and Inequality, Externalities 1. Imperfect competition Only prefect competition makes firms equate marginal cost to price and thus to marginal consumer benefit. Under imperfect completion, providers set a price above the marginal cost. Since consumers equate price to marginal benefit, marginal benefit exceed marginal cost in imperfectly competitive industries. Such industries produce too little compared to the efficient level. Increasing the level of competition...

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Strategy Simulation Game: Economics for Managerial Decision Making

is when marginal cost is equal marginal revenue. When adjusting the price to determine maxim profit the maximizing profit tends to occur at the point where marginal cost equals marginal revenue as demonstrated by the results shown by toggling the price of the demand curve. With a maxim profit Quasar had a total cost of $12.18 billion, total revenue of 13.5 billion, total profit of 1.29 billion and set price per unit of $2,550.00. Additionally with this price, marginal cost and marginal revenue...

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Econ 2106 Exam 3 Cheat Sheet

prevent entry by other firms. 5. The marginal revenue of a monopolist is composed of a quantity effect (the price received from the additional unit) and a price effect (the reduction in the price at which all units are sold). Because of the price effect, a monopolist’s marginal revenue is always less than the market price, and the marginal revenue curve lies below the demand curve. 6. At the monopolist’s profit-maximizing quantity of output, marginal cost equals the market price. So in comparison...

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Revenue (vs) Profit Maximizers (Apple vs Samsung)

com/downloads/AAPL/1983127830x0xS1193125-11-282113/320193/filing.pdf REVENUE OR SALES MAXIMIZATION :-  Revenue is essentially another word for SALE’S. or how much of the goods or services that your business produces is sold to consumers.  Revenue does not take into consideration the costs necessary to produce or market your business’s product, so it does not reflect what the owners ultimately receive  Revenue maximization strategy dictates that a business should do what ever is require to SELL as much as of its products, so it can...

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Supply and Demand and Price

or producer? Explain your answer with a diagram. (4) 3) Consider a perfectly competitive firm in the market for bottled milk. The following table presents information on price, quantity sold, and total costs for this firm: |Quantity (in gallons) |Total Cost (in dollars) | |0 |3 | |1 |5 | |2 ...

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INDIAN RAILWAYS

will set it where marginal cost (MC) equals marginal revenue (MR) as seen on the diagram on the right. This can be seen on a big supply and demand diagram for many criticism of monopoly. This will be at the quantity Qm; and at the price Pm. This is above the competitive price of Pc and with a smaller quantity than the competitive quantity of Qc. The offensive monopoly gains is the shaded in area labeled profit (note that this diagram looks only at the case where there is no fixed cost. If there were...

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Economic Eqilibriums

hard) and (not enter, hard) b)  (enter, soft) and (not enter, soft) c)  (not enter, hard) and (enter, soft) d)  (enter, hard) and (not enter, soft) 2.Suppose P = 20 - 2Q is the market demand function for a local monopoly.  The marginal cost is 2Q. If fixed costs are zero and the firm engages in two-part pricing, the most profits the firm will earn is: a)  $5. b)  $10. c)  $25. d)  $50. P=MC=2Q=20-2Q Q=5 P=MC=2*5=10 Fixed Tariff = (20-10)*5/2=25 3.                            play 2 ...

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Chip Monopoly (Microeconomics

of competition. Going back to the competitive market, companies determine the amount of output by determining the point in which marginal revenue is equal to marginal cost (Case, Fair &amp; Oster, 2009, pg. 169) and the demand curve is horizontal. In a monopolistic environment there is a downward sloping demand curve. In this case there would be no fixed marginal revenue since there is no competition. This is why the demand curve would be sloping downwards. Wonks now owns the entire market...

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Public Goods

Public Goods and Coase theorem April 29-May 2 Part I Public Goods A good is a (pure) public good if once produced it meets two criteria: 1. Non-rival - A good is non-rival if consumption of additional units of the good involves zero social marginal costs of production. 2. Non-excludable - A good is non-excludable if it impossible, or very costly, to exclude individuals from benefiting from the good. Taking these two criteria we can categorize goods into four groups. Rival Non-rival ...

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MB0041 Fall 2014

the assumptions of marginal costing. Differentiate between absorption costing and marginal costing. (Assumptions of marginal costing (all 7 points), Differences of marginal and absorption costing (Includes all 8 points) Answer: Assumptions of Marginal Costing Marginal costing is based on the following assumptions: 1. Segregation of cost into fixed and variable The whole principle of marginal costing is based on the idea that some costs vary with production while some costs Get fully solved...

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ECO 561 TMS

changing economic environment and profit loss Thomas Money Services Inc. has requested recommendations to help increase its revenue, determine its profit maximizing quantity, increase product differentiation, increase barriers to entry, and minimize cost of production.  Market Structure and Elasticity of Demand  Thomas Money Services Inc. operates in a monopolistic competition by offering products and services that can be differentiated and is very competitive with other sellers offering similar...

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Is Microsoft a Monopoly?

Netscape. This should how Microsoft deliberately was creating an imperfect competition by not meeting the conditions of a perfect competition. In a perfect competition no one supplier can influence prices. However, Microsoft was establishing the cost of personal computers, therefore, created an imperfect competition in the operating systems market and allowed them selves to become price makers of this product. Price makers are the monopolists that have control over the price and quantity of their...

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ECO 550 FINAL EXAM

CLICK HERE TO DOWNLOAD ECO 550 FINAL EXAM 1. The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____. 2. The short-run cost function is: 3. Theoretically, in a long-run cost function: 4. Evidence from empirical studies of long-run cost-output relationships lends support to the: 5. In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by: 6. In...

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Market Strategy

various oligopoly firms behaviours - Topics 9-10. Linking Biz Strategy and Microeconomics: Some cases 1. How to respond ____consumers________ behavior Cf. Leather Jacket industry vs. environmental protection, Accommodation cost in GC vs. terrorism 2. Market __positioning______ strategy Cf. Volvo’s strategy focusing on safety in motor vehicle industry 3. _____Price__ competition Cf. Quantas vs Virgin Blue’s competition 4. ___Cost____of production/ R&D investment ...

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Monopoly: Economics and Monopolistic Competition

corporation to produce or serve. Technology and resource monopoly, it means one kind of commodity materials or technology is only owned by one company. Last one is natural monopoly, which means the manufacturer can produce better products with less cost than other manufacturers However, there was a completely special type of market appearing in 1933. E. H. Chamberlain propounded a new theory called monopolistic competition in his book “The Theory of Monopolistic Competition” in 1933. At the...

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Economic Demand and Supply

the price changes make it price elasticity elastic. Price of Nescafe Gold S1 D1 13.50 E1 10.00 Quantity of Nescafe Gold 200 100 50 50 (QD &gt; QS) (200 &gt; 50) 9qd Price Quantity MarginaCost P Marginal Cost Demand Average Total Cost 0 Excess capacity Markup 3.2 THE MARKET STRUCTURE OF NESCAFE GOLD Efficient Scale Quantity Produced As stated above, Nestle is in a monopolistically competitive market. In many ways, the company in this type...

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Taller

able to contribute your own "added value" over and above the lecture material, in the form of your independent reading and thinking about the issues raised in the course. 1. Draw and explain diagrams to show how uncertainty about the marginal abatement cost schedule leads to different outcomes, depending on whether quantity-based or price-based regulation is employed. Using your diagrams, illustrate and explain the circumstances under which quantity-based regulation (such as a system of tradeable...

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Differentiating Market Structures :Elizabeth Andaver

2014Edward PriceDifferentiating Market StructuresMarkets are different, without these different markets there would not be any structure. Being able to understand different markets and its language, like demand, supply, average variable cost and marginal costs we can better prepare for economic and financial future. The market structure and the interaction that occurs can be defined by the number of businesses, and barriers new firms have when entering a particular market. Perfect competition, monopoly...

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ECO 550 Midterm Exam

___________. 3. Income tax payments are an example of ____. 4. Economic profit is defined as the difference between revenue and ____. 5. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____. 6. The standard deviation is appropriate to compare the risk between two investments only if 7. The level of an economic activity should be increased to the point where the ____ is zero 8. The net present value...

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Sample Paper 1 Econ

likely to increase the income of the consumer. Furthermore, education raises one’s productivity, which in turn benefits the society as a whole by increasing national income. Due to positive externalities, the social marginal benefit of merit goods is greater than its private marginal benefit. Consumers in a free market only consider private benefits when purchasing and will therefore underconsume merit goods. This scenario can be shown in the diagram 1 below. As shown in diagram 1, the socially...

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Economics Question Bank

input combination? 54. What is producers’ equilibrium? 55. What is meant by firms’ expansion path? 56. State the equation of isocost line. 57. What is cost? 58. What is cost function? 59. Define opportunity cost. 60. Define money cost. 61. State the uses of LAC curve. 62. What are the determinants of cost? 63. What is meant by division of labor? 64. Define closing stock 65. Define outstanding expenses 66. Define prepaid expenses 67. Define outstanding...

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Supply and Demand and Marginal Cost

You have determined that the service (Z) provided by BF is a function of its medical staff input (M) and sound service input (S) which is given by: Z = M + .5S + .5 MS - S2 BF’s staff budget for the coming year is $1,200,000. Annual employment costs are $30,000 for each social service staff member (S) and $60,000 for each medical staff member (M). (1iiia) Using the Lagrangean multiplier approach calculate the optimal (i.e., service maximizing) combination of medical and social staff. Determine...

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Economic for Market Structure

are price takers. The equilibrium market price is P1 as shown in the figure 3. A farm can sell a vast amount of at P1 without affecting the market price, implying the demand curve perceived by the firm is horizontal, i.e. perfectly elastic. In Marginal approach to profit maximization, the farm’s MR curve coincides with its demand curve, therefore P1 = MR1 as shown in the figure 3. As the supply of chicken in country X decreases and the supply curve shifts to the left, the equilibrium market...

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the four main argument against regulation under the free market economy

to Smith and watts (1982), even in the absence of regulation, there are private economics-based incentives for the organisation to provide credible information about its operations and performance to certain parties the organisation to avoid higher cost. The view is based on the fact that in the absence of information about the organisation’s operation, other parties including shareholders who are not involved in the management of the organisation will assume that managers might be operating the business...

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Effect of Oligopoly on Economy

price will cause a firm to lose revenue, but so will decreasing price. Thus, firms will tend not to change prices. Furthermore, as a result of the kinked demand curve, marginal revenue has a gap or break, and any marginal cost curve would lead to the same optimum quantity. Thus the same price is optimum for many different cost structures. COLLUSION All firms benefit from avoiding price wars and seeking to agree on higher prices and protected sale volumes. These agreements are generally illegal...

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A New House Decision

home should not be an impulsive decision. People respond to incentives and the cost of something is what you give up; are the principles that plays a major role in my decision of purchasing a new home because anyone who is about to make a financial change in their lives would consider all the pros and cons before the final decision is made. Decision-makers have to consider both the obvious and implicit costs of their actions (Slembeck, 2006). not focus on their budget and understands...

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Operation

(Both labor and capital are in LR formula.) TFC =Total Capital Costs = rK Here “r” represents the “capital costs over the specified time period for 1-unit of capital K.” TC = wL + rK, w = wage rate paid to each laborer (per time period),L = number of units of labor used (in that time period),r = capital costs paid for each unit of capital (per time period),K = number of units of capital used (in that time period). Costs = f(Q). Q = f(L). Costs = f(Q(L)). Q=AP*L, MP equals AP, at highest AP. Whereas...

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Government Intervention in National Markets

to the concept of the government intervening in a situation where the costs pertaining to a firm or a number of firms acting in a specific way is higher that its benefits. One might want to say for correctness purposes that one achieves social efficiency when "the marginal benefits to society - or marginal social benefits (MSB) – of producing any given good or service exceed the marginal costs to society or marginal social costs (MSC)." [2] Equity on the other hand is related to the distribution...

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HW 2

output and total costs is shown in the table above. a) Draw Brennan's average total, marginal revenue and marginal cost curves. (Hints: calculate total revenue (P* times Q) first, and then calculate MR) Use your graphs to find Brennan's profit-maximizing output. (Hints: where MC=MR, you can estimate the level of output if not given specific number) If Brennan maximizes his profit, how much profit does he make? (ATC=2.13) d) Should Brennan stay in business? Will other farms with costs the same as...

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Maximizing Profits in Market Structure Papers

Structures – Page 4 selling football tickets at an outrageous price because they know at that moment they have something that is impossible to get elsewhere. Also in determining the output in monopoly, it is necessary to balance the marginal revenues with the marginal cost. Since oligopoly is compose of firms, their prices are determined by the level of organization between them. They are able to decide a certain amount and together they figure which will be the most beneficial for everyone without...

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Ib Microeconomics Internal Assesment

fixed and mobile phones, Telmex and Telcel’s market shares are big enough for them to hold monopolistic powers, allowing them to become “price-setters”. This allows both firms to produce profit-maximizing level of output (where the marginal cost curve intersects the marginal revenue curve). By doing so, they do not achieve allocative efficiency, the socially optimal allocation of resources (Qa in figure 1). Due to the price-setting powers these firms hold, both will be analyzed as purely monopolistic...

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Oligopoly: Cartel and Output

allowing only one price, determined by the ‘combined output of the two firms in conjunction with the market demand curve for the product,book’ to prevail. For simplification purposes, it is assumed that both firms have constant and equal long-run marginal cost curves, and that there is a linear market demand curve. The Cournot model is based on the key element that ‘each firm determines its output based on the assumption that any other firms will not change their outputs.book’ Through this method we...

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Equilibrium price and output for the industry, and the effect on the equilibrium of an imposition of an ad valorem tax, in relation to Cobb Douglas.

negative spill over between private and social, costs and benefits. The long run equilibrium for a perfectly competitive market occurs when the marginal firm makes normal profit only in the long term, as such no firm ever makes abnormal profit in the long term. The diagram shows that the equilibrium is where demand equates to marginal revenue and were this Fig 1. crosses the marginal cost and total cost, as such no firms make long term profits. As...

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Marginal Cost and Total Profits

Exam 1. The Zinger Company manufactures and sells a line of sewing machines. Monthly demand for one its most popular models is given by the following relationship: Q = 400 – 0.5P where P is price and Q is quantity demanded. Total costs of production (including a “normal” return on owners’ investment) per month are: C = 20,000 + 50Q + 3Q2 a. Express total profits (() in terms of Q. b. At what level of output are total profits maximized? What price will be charged...

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Marginal Cost and Correct Answer

the following would tend to make demand INELASTIC? Selected Answer: Correct Answer: 5 out of 5 points the proportion of the budget spent on the item is very small the proportion of the budget spent on the item is very small Question 10 Marginal revenue (MR) is ____ when total revenue is maximized. Selected Answer: Correct Answer: 5 out of 5 points equal to zero equal to zero Question 11 5 out of 5 points Empirical estimates of the price elasticity of demand [in Table 3.4]...

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Evaluate the view that, because price discrimination enables firms to make more profit, firms, but not consumers, benefit from price discrimination

the diagram below. Here there is no single level of output at which the firm can make profit because ATC is always above AR (Total cost will always be above total revenue). The profit maximizing level is MR=MC this is at output 0Q. The total revenue is output 0HGQ and the total cost 0BFQ with the size of the loss of the firm HBFG. The only way for the firm to make a profit is to charge each individual consumer at the exact price they are willing to pay....

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Economics and Marginal Cost Curve

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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Profit Maximization Model

even today. Both small and large firms consistently make an attempt to maximize their profit by adopting novel techniques in business. Specific efforts have been made to maximize output and minimize production and other operating costs. Cost reduction, cost cutting and cost minimization has become the slogan of a modern firm. It is a very simple and unambiguous model. It is the single most ideal model that can explain the normal behavior of a firm. Main propositions of the profit-maximization model ...

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Probabilistic Inventory Models

minimizing the expected cost per unit time that includes the sum of the setup, holding, and shortage costs. [pic] The model has three assumptions. 1. Unfilled demand during lead time is backlogged. 2. No more than one outstanding order is allowed. 3. The distribution of demand during lead time remains stationary (unchanged) with time. To develop the total cost function per unit time, let f(x) = pdf of demand, x, during lead time D = Expected demand per unit time h = Holding cost per inventory unit...

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250679798 597183 Accountancy

preparation of cash flow statement. Meaning of cash flow analysis Objectives of cash flow analysis Explanation of preparation of cash flow analysis Write the assumptions of marginal costing. Differentiate between absorption costing and marginal costing. Assumptions of marginal costing (all 7 points) Differences of marginal and absorption costing (Includes all 8 points) ...

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