Ch1: The Fundamentals of Managerial Economics * Managerial Economics is the application of microeconomic theory to business decision-making. Revenue‚ costs‚ and profits * Revenue(TR=total revenue) is gross inflow of money to firm from producing and selling a good * Costs = 2 kinds of production costs 1. Explicit costs: all costs requiring the firm to pay money to someone (out of pocket costs) 2. Implicit costs: the opportunity costs to the firm of using inputs it owns(land
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David and his wife‚ Alison‚ have been in the garden supplyand nursery business for the last 13 years. David supervises the nursery andgarden supply part of the business‚ while Alison does the administration andbookkeeping and oversees the landscaping projects. Their employees comprise twofull-time gardeners‚ a part-time landscaping consultant and two part-timecashiers. The trading hours are as follows: · Mon – Wed 9 am –6 pm · Thurs – Fri 9 am –6 pm (9 am – 9 pm in summer) · Saturday 8 am
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exist‚ but there are market that comes close‚ for example currency market would be close to perfect competition. Same product‚ many sellers and buyers‚ the down side is the market can be influences by external factors. High entry barriers would make profit difficult‚ long run equilibrium with perfect competition would be affected. It also means all firms would not be at the optimal size‚ unable to combined variable resources efficiently. There are competitive pressure when it comes to high barrier to
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FIVE STAR TOOLS Five Star Tools is a small family-owned firm that manufactures diamond-coated cutting tools (chisels and saws) used by jewelers. Production involves three major processes. First‚ steel “blanks” (tools without the diamond coating) are cut to size. Second‚ the blanks are sent to a chemical bath that prepares the tools for the coating process. In the third major process‚ the blanks are coated with diamond chips in a proprietary process that simultaneously coats and sharpens the blade
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exposure in a profitable manner. Chapter 5: Performance Evaluation To evaluate the performance of BRAC bank Limited the following parameters are considered in the next part of the paper. 1. Asset 2. Deposit 3. Investment 4. Operating Profit 5. Capital Adequacy 6. Loans & Advance 7. Non-funded Income 8. Revenue per Employee 9. Operating Cost per Employee 10. Cost to Income Ratio 11. Operating Cost as a Percentage of Loans and Advances 12.
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1. Why was Dakota’s existing pricing system inadequate for its current operating environment? Profits only when clients placed large orders for cartons Real drop of profits if many clients place small orders Wrong cost determination for individual customers Wrong cost determination for new services provided by DOP (to small charges for the desktop delivery‚ then the actual cost of it) 2. Develop an activity-bases cost system for Dakota Office Products (DOP) based on Year 2000 data. Calculate
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number of important advantages. The model can thus be used as a standard against which to judge the shortcomings of real-world industries. It can help governments to formulate policies towards industry. Before we can examine what price‚ output and profits will be‚ we must first distinguish between the short run and the long run as they apply to perfect competition. In the short run‚ the number of firms is fixed. Depending on its costs and revenue‚
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1. Why was Dakota’s existing pricing system inadequate for its current operating environment? - profits only when clients placed large orders for cartons - real drop of profit if many clients place small orders - wrong cost determination for individual customers - wrong cost determination for new services provided by DOP (to small charges for the “desktop” delivery‚ then the actual cost of it) 2. Develop an activity-base cost system for Dakota Office Products based on
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Ted had decided that the role of his control system would be that of a task manager‚ and he would personally take the role as an emotional leader for managers to make their own decisions. He began implementing his control system by establishing profit centers for each major activity‚
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examples of intergroup social problems that may affect negatively such incentive plans. The third type of incentive plan is known as enterprise incentive plan (e.g. Profit Sharing) which is defined as “reward employees on the basis of the success of the organization over an extended time period” (Bohlander & Snell‚ 2007‚ p. 458). Profit sharing has the advantage that it involves employees at the point that they may feel as partners in the enterprise.
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