In: Social Issues

Submitted By Jroseline

Words 286

Pages 2

Words 286

Pages 2

9/27/15

Economics

Product market Quantity | Price(in whole dollars) | Total Revenue | Marginal revenue | Total cost | Marginal cost | Profit(or loss) | | | | | | | | 0 | 42 | 0 | 0 | 35 | 35 | -35 | 1 | 41 | 41 | 41 | 68 | 33 | -27 | 2 | 40 | 80 | 39 | 94 | 26 | -14 | 3 | 39 | 117 | 37 | 107 | 13 | 10 | 4 | 38 | 152 | 35 | 114 | 7 | 38 | 5 | 37 | 185 | 33 | 129 | 56 | 56 | 6 | 36 | 216 | 31 | 180 | 36 | 36 | 7 | 35 | 245 | 29 | 235 | 10 | 10 | 8 | 34 | 272 | 27 | 296 | -24 | -24 | | | | | | | |

1. What product market did you choose for this data to represent? Explain why.

I chose Air Jordan because it show you when us when the price goes down people are willing to buy more pair of Jordan’s, but the company is also losing money as they putting the price it’s not in their benefits, but it is in the client benefits.

2. At which price and quantity does marginal cost nearly equal marginal revenue without exceeding it? Highlight this point on your graph.

The nearly equal marginal revenue equal to without exceeding the price or lowering it is at four because that is where equilibrium hit.

3. If you were in business for this product, at which price and quantity level would you sell? Explain why.

The price that I feel like I would sell the most IS at 35 because when you look at my chart people are willing to buy 7 Jordan for 35 and the revenue is 245 when you are also looking at the benefits or loss I will not gain a lot of benefits and also if my price goes up or goes down I will not lose a lot of…...

...Marginal Productivity Analysis Kenneth Machol ECO 265 January 28, 2013 Christopher Rakovalis Marginal Productivity Analysis MARGINAL PRODUCTIVITY THEORY: A presumption used to study the profit-maximizing amount of inputs (so as to is, the services of feature of productions) obtained through a company into the assembly of amount produced. Marginal-productivity presumption indicates to the command used for a feature of manufacture is based on the marginal result of the issue. In meticulous, a company is usually eager to shell out an elevated cost intended for the input that is extra dynamic and gives extra to productivity. The command for an input is therefore preeminent termed a consequential command. Marginal productivity assumption is a foundation inside the study of feature markets and the input side of short-run creation. It sheds insight into the order for factors of construction based on the vision that a profit-maximizing business hires inputs based on a judgment connecting the productivity of the input and the price of the input. The rule of Diminishing Marginal proceeds a vital code fundamental marginal-productivity presumption is the rule of diminishing marginal takings. This rule says that as added units of a variable input are extra to a set input, ultimately the marginal result of the variable input decreases. This code is a vital part of short-run assembly study, which offers insight into the positively-sloped marginal price......

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...MARGINAL COSTING Introduction This paper explores the use of cost accounting information for decision-making purposes. DEFINITION OF KEY TERMS Marginal cost: This is the cost of a unit of a product or service, which would be avoided if that unit or service was not produced or provided Break-even point: This is the volume of sales where there is neither profit nor loss. 1 9 6 COST ACCOUNTING S T U D Y T E X T Margin of safety: This is the excess of sales over the break-even volume in sales. It states the extent to which sales can drop before losses begin to be incurred in a firm Contribution: This is the difference between sales value and the marginal cost of sales. To understand this topic, you need to understand the topic on cost behavior first. Marginal costing is built on cost behavior and terms. Of key importance are product costs, period costs, variable costs and fixed cost. Product costs are costs identified with goods produced or purchased for resale. Such costs are initially identified as part of the value of stock and only become expenses when the stock is sold. In contrast, period costs are costs that are deducted as expenses during the current period without ever being included in the value of stock held. We saw how product costs are absorbed into the cost of units of output. Now we describe marginal costing and compare it with absorption costing. Whereas absorption costing recognizes fixed costs (usually fixed production costs) as part......

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...A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. a) How much will the firm produce? i) Profit maximizing firm will always produce where marginal cost = marginal revenue (MC=MR) ii) A monopoly will face a MR curve with twice the slope of the demand curve. Therefore MR = 500+ 2x -10Q iii) the firm will produce where MR = MC = 500-20Q=100 solving for Q we get 20 b) How much will it charge? The demand equation is P=500-10Q Substituting Q in the equation we get P=500-(10x20) = 300 c) Can you determine its profit per day? (Hint: you can; state how much it is.) Marginal cost is constant hence MC=AVC. MC=100=TC=MC x Q = 100x20=2000 Profits = TR-TC TR= PQ= 300 x 20 = $6000 Profit = 6000-2000=$4000 d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price? i) Increase in tax reduces the output and raises the price. ii) P = $500 − 10Q iii) From (e) below, quantity is 15 iv) Therefore, P=500-(10x15) = $350 e) How would the $1,000 per day tax its output per day? Tax of $1000 reduces profit to $3000 from $4000 If Q of 20 produces profit of $4000...

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...CHAPTER 26 Marginal Costing and Cost Volume Profit Analysis Meaning Marginal Cost: The tenn Marginal Cost refers to the amount at any given volume of output by which the aggregate costs are charged if the volume of output is changed by one unit. Accordingly, it means that the added or additional cost of an extra unit of output. Marginal cost may also be defined as the "cost of producing one additional unit of product." Thus, the concept marginal cost indicates wherever there is a change in the volume of output, certainly there will be some change in the total cost. It is concerned with the changes in variable costs. Fixed cost is treated as a period cost and is transferred to Profit and Loss Account. Marginal Costing: Marginal Costing may be defined as "the ascertainment by differentiating between fixed cost and variable cost, of marginal cost and of the effect on profit of changes in volume or type of output." With marginal costing procedure costs are separated into fixed and variable cost. According to J. Batty, Marginal costing is "a technique of cost accounting pays special attention to the behaviour of costs with changes in the volume of output." This definition lays emphasis on the ascertainment of marginal costs and also the effect of changes in volume or type of output on the company's profit. FEATURES OF MARGINAL COSTING (1) All elements of costs are classified into fixed and variable costs. Marginal costing is a technique of cost control and decision......

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...Marginal Analysis In economics, there are three important terms, marginal revenue (MR), marginal cost (MC) and profit (P). Marginal revenue is defined as a change in total revenue that comes from selling one more unit of output. However, when applied to a pure monopoly, marginal revenue is less than the price of all levels of output except the first level. Marginal cost is the additional cost of making one more unit of output. It can be determined by noting the change in total cost which the unit’s production entails. Profit can be divided into two separate terms, normal profit and economic profit (McConnell & Brue, 2008). In the definition for marginal revenue the term total revenue is mentioned. When a company is thinking about changing a products output or quantity (Q), it must think about how the total revenue will change. Total revenue (TR) is the total amount received from the sale of a given amount of output. It can be determined by multiplying the price by the corresponding quantity a company can sell. This brings us back to marginal revenue. Marginal revenue is determined by the change in total revenue divided by the change in quantity (McConnell & Brue, 2008). The formula for this is: MR=ΔTR/ΔQ Within the definition for marginal cost, the term total cost is given. Total cost (TC) is found by adding total fixed cost (TFC) and total variable cost (TVC) together. The formula for this is: TC=TFC+TVC. Once total cost has been determined then marginal......

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...Relationship between Marginal Cost and Marginal Revenue Elisa Montoya Economics and Global Business Applications EGT1 October 23, 2013 Relationship between Marginal Cost and Marginal Revenue This essay will explain the relationship between “Marginal Cost” and “Marginal Revenue”, as well as the importance that these concepts for the maximization of profits. Profit Maximization Explanation For Profit Maximization there are financial estimations that are utilized to figure out the impacts of generating one or more units in a preparation framework. Profits are maximized when marginal cost and marginal revenue are equal, something that all business’ should strive for. This method gives the company the most out of their costs of production and sales generation. Total Revenue to Total Cost According to a particular sequence for maximizing total profit, you need to augment the variance between total revenue and total cost. Total revenue comes from the sale of the firm’s output (widgets in this case); this is the amount that will come from the selling of widgets multiplied by the quantity of widgets sold at that same price. A firm needs two parts when calculating economic profit; total revenue and total cost. Total costs are the sum of implicit and explicit costs. Implicit costs are those costs that are derived from what economists describe as opportunity costs. For example something that is tangible is......

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... MARGINAL COSTING Introduction: MARGINAL COST: Marginal Cost is the additional cost of producing an additional unit of product. In simple, marginal cost is the extra cost of an extra unit of production. It is the total of all variable costs. It composed of all direct costs and variable costs. The CIMA, London, defines marginal cost “as the amount at any given volume of output by which aggregate costs are changed, if volume of output is increased or decreased by one unit”. In other words, it is the cost of one unit of product which would be avoided if that unit were not produced. MARGINAL COSTING: It is also known as “VARIABLE COSTING” or “DIRECT COSTING”. The CIMA, London, defines marginal costing as “The accounting system in which variable costs are charged to cost units and fixed costs of the period are written off in full, against the aggregate contribution. Its special value is in decision making.” Marginal is a technique of costing, in which only variable costs are charged as product costs and included in inventory valuation. Fixed manufacturing costs are not allowed to products. CHARACTERISTICS OF MARGINAL COSTING: 1. Segregation of all costs into fixed and variable elements . 2. Marginal costs (variable costs) as product costs, are only charged to products. 3. Fixed costs as period costs, are charged to costing P &L account. 4. Contribution: is the difference between sales value and marginal cost of sales. 6. Pricing: In marginal......

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...Marginal Costing Student’s Name: Marginal Costing Course code and name Instructor’s name Learning Institution City, State Date of submission Marginal Costing PRINCIPLES Economists incline to think about costs in terms of static, timeless models with continuous cost functions. The real context is, however, one of businesses and systems which already exist and have accrued a collection of assets of various vintages whose accounting cost replicates past prices, past situations and arbitrary conventions about devaluation (Collis, 2012). In the applied economics context, such as utility regulation, the textbook theory is of no help Marginal cost Marginal cost is a close estimate of how economic value would change if return changed (Barrios, 2010). Marginal means an initially determined, however in practice, in light of indivisibility in plant sizes, we are often intrigued by the for every unit change in value that will be brought on by a significant change in a future yield, not of a one unit change. Moreover, venture and limit are not continually variable; they are uneven. Marginal costs include determining, since they are the contrasts between what was and what would have been with diverse yields. The result is that, when the idea of marginal cost totally concurs on a basic level, its estimation includes significantly more than computations established upon a set of standards. All gages are liable to mistake, including minimal cost gages. MARGINAL COSTS...

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...Marginal Cost A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. a) How much will the firm produce? i) Profit maximizing firm will always produce where marginal cost = marginal revenue (MC=MR) ii) A monopoly will face a MR curve with twice the slope of the demand curve. Therefore MR = 500+ 2x -10Q iii) the firm will produce where MR = MC = 500-20Q=100 solving for Q we get 20 b) How much will it charge? The demand equation is P=500-10Q Substituting Q in the equation we get P=500-(10x20) = 300 c) Can you determine its profit per day? (Hint: you can; state how much it is.) Marginal cost is constant hence MC=AVC. MC=100=TC=MC x Q = 100x20=2000 Profits = TR-TC TR= PQ= 300 x 20 = $6000 Profit = 6000-2000=$4000 d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price? i) Increase in tax reduces the output and raises the price. ii) P = $500 − 10Q iii) From (e) below, quantity is 15 iv) Therefore, P=500-(10x15) = $350 e) How would the $1,000 per day tax its output per day? Tax of $1000 reduces profit to $3000 from $4000 If Q of 20......

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...Marginal Cost A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. a) How much will the firm produce? i) Profit maximizing firm will always produce where marginal cost = marginal revenue (MC=MR) ii) A monopoly will face a MR curve with twice the slope of the demand curve. Therefore MR = 500+ 2x -10Q iii) the firm will produce where MR = MC = 500-20Q=100 solving for Q we get 20 b) How much will it charge? The demand equation is P=500-10Q Substituting Q in the equation we get P=500-(10x20) = 300 c) Can you determine its profit per day? (Hint: you can; state how much it is.) Marginal cost is constant hence MC=AVC. MC=100=TC=MC x Q = 100x20=2000 Profits = TR-TC TR= PQ= 300 x 20 = $6000 Profit = 6000-2000=$4000 d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price? i) Increase in tax reduces the output and raises the price. ii) P = $500 − 10Q iii) From (e) below, quantity is 15 iv) Therefore, P=500-(10x15) = $350 e) How would the $1,000 per day tax its output per day? Tax of $1000 reduces profit to $3000 from $4000 If Q of 20......

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...Marginal Costing Dr. Shubhra Product Costing There are mainly two techniques of product costing and income determinationAbsorption Costing: This is a total cost technique under which total cost (i.e., fixed cost as well as variable cost) is charged as production cost. In other words, in absorption costing, all manufacturing costs are absorbed in the cost of the products produced. Marginal Costing: An alternative to absorption costing is marginal costing, also known as ‘variable costing’ or direct costing. Under this technique, only variable costs are charged as product costs and included in inventory valuation. Fixed manufacturing costs are not allotted to products but are considered as period costs and thus charged directly to Profit and Loss Account of that year. Fixed costs also do not enter in stock valuation. Marginal Costing: Definition CIMA London as ‘The accounting system in which variable costs are charged to cost units and fixed costs of the period are written off in full, against the aggregate contribution. Its special value is in decision making’. Segregation of costs into fixed and variable elements • In marginal costing all costs are classified into fixed and variable. Semi-variable costs are also segregated into fixed and variable elements. Marginal costs as products costs • Only marginal (variable) costs are charged to products produced during the period. Fixed costs as period costs • Fixed costs are treated as......

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...A Small Peek into Big B’s Car Collections... Ref. No.: ME0010 A Small Peek into Big B’s Car Collections: Does Law of Diminishing Marginal Utility Hold Good? International automobile giants like Toyota, Ford, Chevrolet, Mercedes, Suzuki and Hyundai have carved a niche for themselves in the Indian market. The plausible success factor of these foreign players in the Indian four-wheeler market is the widespread research of the consumer behaviour. All aspects of the behaviour pattern of the Indian consumer across all socio-economic strata, regions and towns are extensively studied. These include lifestyle, personal tastes and preferences, receptiveness for an effective product, credit availability, income growth, exposure to media, etc. Utility and Rationality People demand goods because the latter satisfy the wants of the former. A car manufacturer, like any other firm operates in order to create something for the satisfaction of some wants. An automobile company produces car to serve as a safe and comfortable means of commutation. Car has utility for people who desire to have a car. While a person staying near the office place does not show much desire to own a car, one residing away from the work place has much more desire to possess one. The 2008 four-wheeler Total Satisfaction Survey by TNS Automotive, a comprehensive automotive study in India covers over 45 models with evaluation of consumer behaviour in key areas of sales satisfaction, product quality, vehicle......

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...Marginal product From Wikipedia, the free encyclopedia Average and marginal product curves small.png In economics and in particular neoclassical economics, the marginal product or marginal physical product of an input (factor of production) is the change in output resulting from employing one more unit of a particular input (for instance, the change in output when a firm's labor is increased from five to six units), assuming that the quantities of other inputs are kept constant. [1] The marginal product of a given input can be expressed [2] as MP = \frac{\Delta Y}{\Delta X} where \Delta X is the change in the firm's use of the input (conventionally a one-unit change) and \Delta Y is the change in quantity of output produced (resulting from the change in the input). Note that the quantity Y of the "product" is typically defined ignoring external costs and benefits. If the output and the input are infinitely divisible, so the marginal "units" are infinitesimal, the marginal product is the mathematical derivative of the production function with respect to that input. Suppose a firm's output Y is given by the production function Y=F(K,L) where K and L are inputs to production (say, capital and labor). Then the marginal product of capital (MPK) and marginal product of labor (MPL) are given by: MPK=\frac{\partial F}{\partial K} MPL=\frac{\partial F}{\partial L} In the "law" of diminishing marginal returns, the marginal product......

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...Need Answer Sheet of this Question paper, contact aravind.banakar@gmail.com www.mbacasestudyanswers.com ARAVIND – 09901366442 – 09902787224 MANAGERIAL ECONOMICS Section – A (Marks – 25) Attempt all questions 1. How is Price Elasticity measured? 2. State and explain the ‘Law of variable proportions’ 3. Define ‘Production Function’. Explain with diagram, the three stages of the Law of Variable Proportions. 4. Define production function. State and explain the ‘Law of Diminishing Marginal Returns’ 5. What is ‘Cost benefit analyses? Justify its use in the implementation of developmental projects. Section – B (Marks – 25) Attempt all questions – 1. What is ‘Segmentation’? Explain Product segmentation and Market segmentation concept. 2. What is ‘Wholesaling’? Discuss various benefits of Wholesaling. 3. Explain different Features of Perfect Competition. 4. Cost Volume Profit Analysis. 5. What is Capital Rationing? Section – C (Marks – 50) Attempt any five questions – 1- Explain in detail the nature and scope of Managerial Economics. How Micro Economics differs from Managerial Economics? 2. What is Empirical Production Function? Explain the optimum combination of inputs with diagrams. 3. What is Cost of Capital? Explain its structure and role in inter- national competitiveness. 4. What is Elasticity of Demand? Explain Price, Cross and Income Elasticity of Demand used in managerial decision making process. ...

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...In economics, marginal revenue is the revenue that an additionally produced unit will create, if sold. When a company is in a competitive market, the price of the unit sold does not change, so marginal revenue is the price of a single unit. The relationship between marginal revenue and total revenue is calculated when marginal revenue is equal to the change in total revenue divided by the change in quantity, when the change in quantity is equal to a single unit. Mathematically marginal revenue is calculated using the product rule formula of MR = d(TR)/dQ where MR equals marginal revenue, TR equals total Revenue, and Q equals quantity On the contrary, marginal cost is the cost incurred to create one additional unit. This would include for example the cost of additional equipment if it was needed to produce the additional unit. Marginal cost relates to total cost in that marginal cost is the change in total cost that comes when the number of units produced is increased by one. Total cost is found when adding fixed costs plus variable costs and multiplying by the amount of units produced. Marginal Cost is found by using the calculus formula of MC = dTC/dQ, where MC is equal to marginal cost, TC is equal to total cost, and Q is equal to quantity. Marginal cost is also the slope of the total cost curve when cost and quantity are represented on a graph. Profit is the amount of money a company makes when the total cost of production is subtracted from total revenue. If...

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