Essays Tagged: "Marginal Cost"
A little information about Macro Economics.
tivity.Average cost: the total cost of undertaking an activity divided by the units of the activity.Marginal benefit: the extra benefit from undertaking one more unit of an activity.Marginal cost: the ...
Subjects: Social Science Essays > Economics
Microeconomic Theory, Price Policy in Oligopoly.
and hence there is a kink in the demand curve faced by the firm.For straight line demand curves the marginal revenue line lies halfway between the demand curve and the vertical axis. It is thus easy t ... easy to show that the kink in the demand curve implies a discontinuity, i.e. a sudden drop, in the marginal revenue curve of the firm.Marginal cost could thus vary greatly but still pass through this ...
Subjects: Social Science Essays > Economics
The use of marginal costing techniques for managerial decision making ignores important commercial factors. Discuss this statement including relevant examples to support your argument.
The cost of a product under marginal costing or variable costing includes only the variable costs of making the product. The var ... lude direct material, direct labour and variable overheads. Variable costs per unit approximate the marginal cost of making another unit of a product. Selling price minus variable costs adds up to con ... bute to profit. The fixed costs are treated as period costs and are expensed in the period incurred.Marginal costing can be used to assist in decision making in the following circumstances: acceptance ...
Subjects: Businesss Research Papers > Accounting
Economics MR=MC profit maximizing/loss minimizing
economics, the point of profit maximizing and loss minimizing is called MR=MC. This point is where marginal revenue equals marginal cost, meaning that cost does not exceed revenue and revenue does no ... st away from the total returns. The optimal point of production for the firm is at the point MR=MC. Marginal revenue is defined as the change in total revenue as a result of producing an additional un ...
Subjects: Social Science Essays > Economics
What are the implications for demand in the short and long run of undercharging for road transport?
d to quantify as there are many external costs not considered by an individual when calculating the marginal cost and benefit ratio before undertaking a journey (Parkin. 2000). These externalities inc ... increase the demand for road transport, road space and road maintenance, in the short term, as the marginal benefit of making a journey would become greater than the marginal cost of the journey.Subs ...
Subjects: Law & Government Essays
Explain why Siny Plc may attempt to discriminate on price and advise the company on the conditions necessary for implementing the strategy.
Price discrimination can be defined as the differences in the ratio of price to marginal cost across buyers or unit of a good. One form of price discrimination is the practice of a ... rplus in this transaction. If we assume that the firm is a monopolist, its demand curve becomes the marginal revenue curve i.e. it does not have to lower the price to the higher value customers in ord ... nto a peak market with inelastic demand, and an off-peak market with elastic demand. The demand and marginal revenue curves for the peak market and off peak markets are labelled A and B respectively. ...
Subjects: Businesss Research Papers > Markets & Exchanges
Balance sheet
and its causes.It is not impossible to account for each and every penny for a company. However, the marginal cost of accuracy rises exponentially. Financial accounting principles recognise that human ...
Subjects: Businesss Research Papers > Accounting
Industrial Profitability.
g firms in the industry. In some industries firms compete aggressively, pushing prices close to the marginal cost. In other industries firms choose to find ways to coordinate their pricing or compete ...
Subjects: Businesss Research Papers
Profit maximisation is not the sole objective of business.
e main aims of the firms. The generally accepted view is the long run will wish to maximize profit. Marginal Cost and Marginal Revenue can be used to find the profit maximising level of output. Margin ... aximising level of output. Marginal cost is the addition to total cost of one extra unit of output. Marginal revenue is the increase in total revenue resulting from an extra unit of sales. Economic th ...
Subjects: Businesss Research Papers
Unitron Corporation: Teaching Commentary
time--"just maximize the total revenue over the batch." Like the comparable adage to "price so that marginal cost equals marginal revenue," the economists' advice about joint costing is certainly accu ... ow percent of total business, this contract seems like a good one to avoid! It only looks good on a marginal cost basis. As noted many times earlier in this book, this author takes the position that " ...
Subjects: Businesss Research Papers > Case Studies
Barco case discussion
case where Sony was to charge $9,000 for its new 1270 'super data' projector (assuming that 1270's marginal cost is much lesser than $9000). Do you think that Sony can merge the data and the video se ...
Subjects: Businesss Research Papers > Case Studies
Econ
if an appropriate side payment is made. The efficient level of production of any good is where the marginal benefit and marginal cost of the good are equal. Graphical, this is here the marginal cost ... Graphical, this is here the marginal cost curves intersect. In a perfectly competitive market, the marginal cost of a good is given by ate market supply curve, and the marginal benefit of the good is ...
Subjects: Businesss Research Papers > Management
Economics
behavior of oligopolies. Oligopolies tend to achieve inefficient results from setting prices above marginal cost, except in sales maximizing firms, such as the telecommunications industry. According ...
Subjects: Businesss Research Papers > Case Studies
Market Structure simulation
a monopoly the demand curve is downward sloping so the company must operate at an output where the marginal revenue equals marginal cost. East-West decides to set the price at 7.85 per ton which resu ... n different ways. In a perfect competition market structure it maximizes profits when profits equal marginal revenue and equal marginal costs. In a monopoly the company can maximize profits where marg ...
Subjects: Businesss Research Papers
East-West Transportation Inc Market Structure Simulation
enue curves faced by the freight transportation company. These cost and revenue curves, consists of Marginal Cost (MC), Marginal Revenue (MR), Average Total Cost (ATC), and Average Variable Cost (AVC) ... mines at this point, East-West Transportation Inc will continue to operate. Maclachlan (2008), "The marginal revenue for a perfectly competitive firm is the market price determined by the intersection ...
Subjects: Social Science Essays > Economics
How the firm chooses the level of output that maximises profit under perfect competition
etitive market. Firstly, it will define some crucial concepts, such as total cost, average cost and marginal cost in terms of cost. Then, it will apply some crucial concepts to explain why marginal re ... cial concepts to explain why marginal revenue and marginal cost are significant and it will explain marginal revenue in detail, especially under perfect competition. Subsequently, this essay will empl ...
Subjects: Businesss Research Papers > Markets & Exchanges
Scenario Analysis
Scenario).II.Effect On RevenueIn the initial stages of production, where output is relatively low, marginal revenue will usually exceed marginal cost. So it is profitable to produce through this rang ... r Will is the internet. Because later stages of production, where output is relatively high, rising marginal costs and causes marginal revenue to decrease, the internet will provide a wider range of o ...
Subjects: Social Science Essays > Economics
Economic Decision Making
ess involved in our decisions and how it affects us. We look for alternatives and we gauge what the marginal benefits would be if certain decisions are made. Economic decisions are made by both young ... n an interest bearing account. The third principle states that rational people will only act if the marginal benefits exceed the marginal cost. The fourth principle states that people will be more lik ...
Subjects: Businesss Research Papers > Management
Differentiating Between Market Structures
med a monopoly. In such a market, the division has the advantage to set prices at a point where the marginal revenue is equal to the marginal cost. Since a monopoly market does not have competitors an ... ly maximizes it profits by choosing its own costs and output. A monopoly will maximize profit where marginal cost equals marginal revenue or P=MC=MR. The monopolist will produce a profit due to barrie ...
Subjects: Businesss Research Papers
Supply and Demand and Price Elasticity Paper
individual decision-making. It will also provide an example of a decision in which you compared the marginal benefits and the marginal costs. The paper will explain what incentives could have led maki ... al people think at the margin, means that a rational or typical decision maker will act only if the marginal benefit of the action exceeds the marginal cost. A perfect example of this just happened. I ...
Subjects: Social Science Essays > Economics