...EGTI Task 1 Marginal Analysis In order for any business to be successful they would need to know how to make the most profit for the goods they are producing and selling. In this paper I am going to explain some of the key terms that companies need to keep in mind when operating their business. First, we will start with marginal revenue, which is defined simply as the extra revenue that is made for each additional unit of a product that is sold. This is directly related to marginal cost, which is what it costs the company to make that additional unit of product. Next there is total cost and total revenue. Total cost is what the company spends to produce a certain quantity of its product. This includes the cost of all the materials, labor, production, etc. Total revenue is defined as the total amount of money received from producing and selling that given quantity of a product. Total revenue is not to be confused with profit however. Profit comes from subtracting the total cost of units produced from the total revenue made. Simply put: Profit = Total revenue – total cost. In order to determine profit maximization using total revenue to total cost Company A would need to find the optimal output level. For each widget Company A produces both the total cost and total revenue increase. However, if total cost ever exceeds the total revenue the company will begin to lose money. The chart below shows the point at which Company A would reach their profit maximization using...
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...Course Objectives link. Also, please note that the TCO(s) to be covered during any given week are specified in the Objective section for that course week. Quiz 1 addresses material covered in Weeks 1 and 2 of the course. The TCOs at issue are: Course Objective Description A Given a demand function and a supply function, illustrate how the price mechanism, in response to changes in other demand or supply factors, leads to a new market equilibrium price and level of output. B Given appropriate marketing data, including price elasticity coefficients, demonstrate how to use this information in product pricing in order to maximize revenues. C Given knowledge of key cost and marginal revenue relationships, use marginal analysis to demonstrate shutdown, break-even and optimal output points, as well as the optimal amount of a resource to utilize. You will note that the problems that have been assigned from the book focus on these TCOs. The problems address the basics while Discussion topics focus on broad applications. The quizzes (and the final exam) emphasize the basics. So, make sure you completely understand the assigned homework problems before attempting the quiz. The 2 hour quiz will consist of 10 short answer questions worth 10 points each (100 points total). Each question has several parts. These are “short answer” questions that require you to work through an issue and report your conclusion. You will have to make calculations, so be prepared...
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...Course Objectives link. Also, please note that the TCO(s) to be covered during any given week are specified in the Objective section for that course week. Quiz 1 addresses material covered in Weeks 1 and 2 of the course. The TCOs at issue are: Course Objective Description A Given a demand function and a supply function, illustrate how the price mechanism, in response to changes in other demand or supply factors, leads to a new market equilibrium price and level of output. B Given appropriate marketing data, including price elasticity coefficients, demonstrate how to use this information in product pricing in order to maximize revenues. C Given knowledge of key cost and marginal revenue relationships, use marginal analysis to demonstrate shutdown, break-even and optimal output points, as well as the optimal amount of a resource to utilize. You will note that the problems that have been assigned from the book focus on these TCOs. The problems address the basics while Discussion topics focus on broad applications. The quizzes (and the final exam) emphasize the basics. So, make sure you completely understand the assigned homework problems before attempting the quiz. The 2 hour quiz will consist of 10 short answer questions worth 10 points each (100 points total). Each question has several parts. These are “short answer” questions that require you to work through an issue and report your conclusion. You will have to make calculations, so be prepared...
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...EGT1 Task 1 Marginal Analysis Student Name Western Governors University Student ID: The primary focus of this paper is to demonstrate the concepts of marginal revenue and marginal cost, how the two are related to each other and how they are used by a company in profit maximization. By factoring, analyzing and comparing the various data on revenue and cost, a company can use a marginal analysis to determine the best direction to maximize profits. A marginal analysis is the “comparisons of marginal benefits and marginal costs, usually for decision making” (McConnell, 2011, p. 6). A. There are two methods to describe profit maximization. Further details of both methods and how each are used to determine profit maximization are as followed: 1. One method of understanding profit maximization is by using the relationship of total revenue and total cost. Total revenue is the total income that a company receives from a product or service. The price multiplied by the quantity of the product or service equates to the total revenue. Total cost is the total expense or cost to a company to produce a product or provide a service. Profit is determined by subtracting the total cost from the total revenue. Initially, as production or quantity increases, profit increases as well. There is a point, however, where the profit will maximize and then begin to diminish as the unit quantity increases. This point is where the greatest profit is realized in relation to the total revenue...
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...Week 5 Individual Assignment Melanie Lentz FIN/540 February 20, 2012 Hillman Lo Week 5 Individual Assignment Problem Set 1. TasteeFruit Company is a small producer of fruit-flavored frozen desserts. For many years, its products have had strong regional sales on the basis of brand recognition. However, other companies have begun marketing similar products in the area, and price competition has become increasingly important. John Wakefield, the company’s controller, is planning to implement a standard-costing system and has gathered considerable information on production and materials requirements for TasteeFruit’s products. He believes that the use of standard costing will allow the company to make better pricing decisions. TasteeFruit’s most popular product is raspberry sherbet. The following information is provided: * The sherbet is produced in 10 gallon batches * Each batch requires 6 six quarts of good raspberries The fresh raspberries are sorted by hand before entering the production process. Because of imperfections in the raspberries and normal spoilage, 1 quart of berries is discarded for every 4 quarts accepted. 3 minutes is the standard direct-time for the sorting required to obtain . 1 quart of acceptable raspberries. The acceptable raspberries are then blended with the other ingredients; blending requires 12 minutes of direct-labor time per batch. After blending, the sherbet is packaged in quart containers. Wakefield has gathered the following...
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...Chapter 3 Demand Analysis Solutions to Exercises 1. With more rural households, Canadian demand for gasoline maybe less price sensitive than U.S. demand where urbanities are offered more mass transit alternatives. 2. %ΔQ = −20 %ΔP = +5 %ΔY = −2 %ΔPgas = +20 a. %ΔQ = 1.5(−2%) = −3% b. %ΔQ = −0.3(20%) = −6% c. −20% = 1.5(−2%) + (−0.3)(20%) + (ED)(5%) ED = −2.2 EY = 1.5 EX = −0.3 3. a. ED = [(450 − 525)/(450+525)]/[(8000 − 7200)/(8000+7200)] ED = −1.46 b. EY = [(400 − 450)/(400+450)]/[(590 −610)/(590+610)] EY = 3.53 c. EY = 3.53 = [(Q2 − 400)/(Q2+400)]/[(630 − 590)/(630+590)] Q2 = 505 airplanes d. %ΔQP = ED(%ΔP) = −1.46 [(8500 − 8000)/(8500+8000)/2](100) = -8.85% %ΔQY = EY (%ΔY) = 3.53 [(630 −590)/(630+590)/2](100) = +23.15 16 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. Chapter 3/Demand Analysis Net effect = %ΔQP + %ΔQY = −8.85% + 23.15% = 14.3% 17 Using the average quantity [(Q2 + Q1)/2] as the base in computing the percentage change yields: %ΔQ = 14.3% = [(Q2 − 400)/(Q2 + 400)/2](100) Q2 = 461.6 airplanes Using the initial quantity (Q1 = 400) as the base in computing the percentage change yields: Q2 = Q1(1 + net effect) = 400(1 + 0.143) = 457.2 airplanes Note that these two alternative solutions differ by less than 1 percent. 4. New demand = 100% + .04(−1.5)(100%) + .11(.6)(100) = 100.6% Total revenue will...
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...As. J. Food Ag-Ind. 2012, 5(05), 364-373 Asian Journal of Food and Agro-Industry ISSN 1906-3040 Available online at www.ajofai.info Research Article Kinetics of the reduction of pesticide residues in vegetables by ultrasonic cleaning Ratikorn Buakham1, Sirichai Songsermpong1* and Chutima Eamchotchawalit2 1 Food Engineering Program, Department of Food Science and Technology, Faculty of Agro-Industry, Kasetsart University, Jatujak, Bangkok 10900, Thailand. Thailand Institute of Scientific and Technological Research. Klong Luang, Pathumthani 12120, Thailand. 2 Email: sirichai.so@ku.ac.th Abstract The problem of pathogen and pesticide residues in vegetables is a big concern to both consumers and exporters. This study introduced a new method of cleaning vegetables with high frequency sound waves (ultrasonic) as a way to solve the problem. This research aimed at studying the kinetics of reduction of pesticide residues in four kinds of vegetables: coriander, kale, yard long bean and red chili by using the ultrasonic cleaner (60 kHz 140 W) with tap water compared with soaking in tap water. The cleaning was done at 20, 25 and 30oC for 0, 3, 7 and 10 minutes. The determination of the toxicity levels was done by means of cholinesterase inhibition technique. The decimal reduction time, the reaction rate constant and the activation energy were determined. It was found that ultrasonic cleaning at 25oC and soaking in tap water at 30oC was the best combination to reduce...
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...Question 1a The table below illustrates the effect of price (P), on the quantity supplied (QS), quantity demanded (QD), and the resulting surplus (+), where demand is less than supply or shortage (-), where demand is more than supply. The derivation of the figures below is by taking the difference between the quantity supplied and the quantity demanded at various price levels. Price $1.00 $1.10 $1.20 $1.30 $1.40 $1.50 $1.60 $1.70 $1.80 $1.90 $2.00 $2.10 $2.20 $2.30 $2.40 $2.50 $2.60 $2.70 $2.80 $2.90 $3.00 $3.10 $3.20 $3.30 $3.40 $3.50 Demanded (Qd) 60,000 58,000 56,000 54,000 52,000 50,000 48,000 46,000 44,000 42,000 40,000 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 Supplied (Qs) 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000 Surplus (+) / Shortage (-) -60,000 -56,000 -52,000 -48,000 -44,000 -40,000 -36,000 -32,000 -28,000 -24,000 -20,000 -16,000 -12,000 -8,000 -4,000 0 4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000 36,000 40,000 [Type text] [Type text] [Type text] [Type text] Question 1b Below are the demand and supply curves for the lumber/forest products industry over the range of prices indicated previously. Price Quantity [Type text] [Type text] [Type text] [Type text] Question 2a AVC = a + bQ + cQ^2 Month Jan Feb Mar Apr May Jun...
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...= 2 DS d H 1 − p EPQ = 1224.74 Max Inventory, Imax = EPQ * (1-d/p) = 1224.74* (1-100/500) = 979.92 Storage Capacity = Max Inventory = 980 Q 2: If annual demand is 24,000 units, orders are placed every 0.5 months, and the cost to place an order is $50, what is the annual ordering cost? a) b) c) d) e) 50 600 1200 2400 Can not be determined Answer: c Solution Number of Orders = 24 Annual Ordering Cost = 24 * 50 = 1200 Q 3: If the Economic Order Quantity (EOQ) is ordered, which of the following is true? a) Annual ordering cost exceeds annual holding cost. b) Annual holding cost exceeds annual ordering cost. c) Annual ordering cost is equal to annual holding cost. d) The sum of annual ordering cost plus annual holding cost is maximized. e) The annual holding cost curve is decreasing. Answer: c Page 2 of 16 Q 4: The basic Economic Order Quantity (EOQ) model can be considered a special case of the Economic Production Quantity (EPQ) model under which of the following condition? a) The demand per day is greater than production per day. b) The production rate per day approaches 0. c) The production rate per day approaches infinity. d) The back order cost approaches infinity. e) d/p = 1, where d is the demand per day and p Is the production per day. Answer: c Solution EOQ = 2 DS H EPQ = 2 DS d H 1 − p ...
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...Monopolistic competition, however, is a multiprice industry.” Explain. 3. How does economic rivalry take place in monopolistic competition? Describe the different aspects of product differentiation and price competition. 4. What are types of firms that exemplify monopolistic competition? 5. How are monopolistically competitive industries identified with concentration ratios? 6. Assume that the short run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion. Compute the marginal cost and marginal revenue of each unit of output and enter these figures in the table. Total Marginal Quantity Marginal Output cost cost demanded Price revenue 0 $ 25 0 $60 1 40 $_____ 1 55 $_____ 2 45 _____ 2 50 _____ 3 55 _____ 3 45 _____ 4 70 _____ 4 40 _____ 5 90 _____ 5 35 _____ 6 115 _____ 6 30 _____ 7 145 _____ 7 25 _____ 8 180 _____ 8 20 _____ 9 220 _____ 9 15 _____ 10 265 _____ 10 10 _____ (a) At what output level and at what price will the firm produce in the short run? What will be the total profit? (b) What will happen to demand, price, and profit in the long run? 7. Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling...
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...Economics and Global Business Communications Name Course Instructor Date Competency 309.1.1: Marginal Analysis A.1. Profit maximization is the desire and target of all trading companies that operate in various industries, in different markets (Taylor & Weerapana, 2012). They must first of all produce products for sale to achieve the same. This production results into various financial costs that have to be overcome with the revenue from the sales. The difference between the total revenue and total costs becomes the profit to the firm. The total revenue to total cost approach is, therefore, concerned with maximizing the difference between total revenue and total cost. 2. Marginal revenues to marginal cost approach are meant to supplement the total revue to total cost approach (Taylor, 2008; Landsburg, 2011). In this perspective, marginal profit is arrived at after subtracting marginal cost from the marginal revenue of a firm. In the event that the marginal revenue is higher than the marginal cost at a given level of output, it follows that additional quantities should be produced. B. 1. Marginal revenue is known to be the revenue that accrues to the firm after having produced one extra unit on top of what had been produced initially. It is got from dividing the total revenue obtained by the firm from trading activities with the number of units sold. Marginal revenue increases when the...
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...Case Study 3: Setting tuition and financial aid Instructor: Patricia Wiseman Managerial Economics MBA-540-MB01 Saint Leo University Sushma Madhavaram Summary: Prices are the variable property which can increase or decrease the desire of purchasing the commodity which in simple terms referred as demand. For most of the commodities if prices soar high then people purchase less good hence reducing demand in the same way if supply increases prices go down increasing demand. This basic principle is the basis for the ‘law “of demand which can be described as quantity demand plummets as prices go upward, other variable factors constant. To understand the demand and price relation economists refer demand as schedule of quantities of commodity people want to buy at various prices, other factors constant (Colander, Rockerbie, & Richter, 2006, p.73). Whereas quantity demand is referred as demand of goods at certain price in the demand curve. Ursinus College in Pennsylvania in the year 2000 increased their tuition fee 17.6% to $23,460 in order to increase college revenue and funds to support financial aid which also in turn increased their admissions (Brickley, Smith, & Zimmerman, 2009, p.110). The conjecture of college president is increase in demand is against the law of the demand because of college going student’s snob mentality and their comparison of quality with respect to price. He speculated student’s presumption of costly colleges will have better quality education...
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...Alison Holt Managerial Economics MBA 540 Chapter 4 Case Analyzing Managerial Decisions: Setting Tuition and Financial Aid In 2000, Ursinus College raised its tuition 17.6 and fees percent to $23,460. After the fee increase, the college recognized an increase in applications by 200 compared to the previous year. There was an assumption by the college president that the applicants concluded the college must be better since its cost was more than others were. In addition, colleges such as the University of Notre Dame, Bryn Mawr College, Rice University, and the University of Richmond raised their tuition in order to match rival colleges, thus causing an increase in applications also. On the other hand, North Carolina Wesleyan College lowered their tuition and fees ten years ago by 22 percent; however, the decrease in costs only attracted a small number of candidates, thus determining the reduction in tuition and fees was not attractive to the students. Susan Hansen, Admissions Director, at a liberal arts college in the East gave a recommendation to increase tuition and reduce financial aid to students in order to increase enrollment. Susan projects the increase in tuition and the decrease in financial aid will solve the school’s financial problems. Last year, the college enrolled 400 new students who each paid an effective tuition of $15,000 (after financial aid) totaling $6,000,000. Susan projects the increased demand from charging an effective tuition of $25,000; the college...
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...Case Assignment Chapter 4 8/31/2014 MBA-540 Chapter 4: Setting Tuition and Financial Aid 1. Evaluate Susan’s analysis and recommendation. At first sight it is easy to see why Susan would believe that the demand for applying to a college increases when the cost of tuition is increased, based off the statistics seen at colleges such as Ursinus College and Wesleyan College. Ursinus increased the cost of tuition and the demand increased. Wesleyan did the opposite and decreased there tuition and the demand decreased. Susan’s belief in an upward slope, where the quanitity demanded increased with price, is seen as a Giffen good. Giffen good is when “a good for which a demand increases as the price increases and falls when the price decreases” (Investopedia, 2014). This contradicts the law of demand. As discussed in the text the law of demand refers to the demand curve sloping downwards because individuals buy less of a good and not more when the price increases (Brickley, Smith & Zimmerman, 2009). Giffen good is very rare to the point where there is actual debate about their existence, because the good in question must be considered an inferior good and there must be a lack of close substitutes (Investopedia, 2014). It would be irresponsible as a consultant to make a decision based on just Susan’s theory, especially when there could be other factors that not being considered for the affects of this demand increase over the increase in tuition. It is important...
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...Making- Please Add Own Images HCS 438 Week 3 DQ 1 HCS 438 Week 3 DQ 2 HCS 438 Week 3 Quiz HCS 438 Week 4 Analysis of Newspaper Research Report Paper HCS 438 Week 4 DQ 1 HCS 438 Week 4 DQ 2 HCS 438 Week 4 Quiz HCS 438 Week 5 Analysis of Data Reports in Published Journal- Please Add Own Images HCS 438 Week 5 Quiz ------------------------------------------------------------------------------------------ HCS 438 Week 2 Checkpoint Uses of Statistical Information For more classes visit www.snaptutorial.com hcs 438 week 2 checkpoint uses of statistical information ------------------------------------------------------------------------------------------ HCS 438 Week 2 Quiz For more classes visit www.snaptutorial.com HCS 438 Week 2 Quiz 1. In a Gallup poll of 1,038 adults, 540 said that second-hand smoke is very harmful. What is the percentage of adults who said second-hand smoke is very harmful? 2. The first class in a relative frequency table is 50-59 and the corresponding relative frequency is 0.2. What does the 0.2 value indicate? 3. When you add the values 3, 5, 8, 12, and 20 and then divide by the number of values, the result is 9.6. Which term best describes this value: average, mean, median, mode, or standard deviation? 4. What is the range of the values 2.0, 3.7, 4.9, 5.0, 5.7, 6.7, 8.5, and 9.0? What is the mean? Total/Quantity of values = 45.5/8 = 5.6875, which equates to 5.69 when rounded What is the mode? 2.0, 3.7, 5.0, 5.7, 6.7, 8...
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