Chapter 1 Applied Problem 1 1. At the beginning of the year, an audio engineer quit his job and gave up a salary of $175,000 per year in order to start his own business, Sound Devices, Inc. The new company builds, installs, and maintains custom audio equipment for businesses that require high-quality audio systems. A partial income statement for Sound Devices, Inc., is shown below: 2010 Revenue Revenue from sales of product and services $970,000 Operating costs and expenses Cost
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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
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different conceptual approaches to the study of economics: microeconomics and macroeconomics. Microeconomics studies phenomena related to goods and services from the perspective of individual decisionmaking entities—that is, households and businesses. Macroeconomics approaches the same phenomena at an aggregate level, for example, the total consumption and production of a region. Microeconomics and macroeconomics each have their merits. The microeconomic approach is essential for understanding Attributed
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Team D's View on Economic’s in the World Theresa Brooks, Maria Hooker, Robert Pontau, Ira Smith, Nicolle Timmons ECO/561 January 20, 2014 Alfred Igbodipe Team D's View on Economic’s in the World Introduction The objectives for week two are to 1) identify production level to maximize profits, 2) explain how to balance fixed and variable costs, 3) and apply economic cost concepts in making business decisions. The group discussed these objectives and came to the following conclusions. Identifying
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Maximizing Profits in Market Structures Instructor: Market Structure The Market structure is the organizational and characteristics of a market. The focus on those characteristics affects the nature of competition and pricing. For example, if someone asked what brand of car or shoes they have, it is likely that the person could tell you the brand name. But if you asked them what type of milk, water, eggs that they purchased, most likely they will tell you that they don’t know and
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#3.) a) Compute the marginal cost curve for Ajax Solution: The marginal cost is the first derivative of the total cost curve w.r.t. Q MC=dTC/dQ = -5000 + 2*100Q = 200Q-5000 b) Given Ajax's pricing strategy, what is the marginal revenue function for Ajax Solution: The price charged by the Ajax is taken from the market and not decided based on its supply curve so we have MR=P=$20,000 c) Compute the profit-maximizing level of output for Ajax Solution: The profit
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Marginal revenue is a gain to a company from an additional unit of a product; which is additional income from selling one more unit of a good. Marginal revenue is the change in total revenue, with respect to the variable that is changing. (McConnell & Brue, 2012) Total revenue is equal to the price that can be charged consistent with selling a given quantity. Total revenue is considered the total sales revenue and other revenue for a particular period. (McConnell & Brue, 2012) Marginal revenue is
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TRANSPORT ECONOMICS – Costs and Revenues In economics it is important to understand the costs and revenues of firms. This will give an important insight into the behaviour of firms. Basic / traditional economic considers that the sole purpose of firms is to maximise profits. This goal then leads firms to minimise costs and maximise profits. Transport firms are no different. In the UK we have many types of firms * Rail * Network Rail is responsible for rail infrastructure
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Week 4 Check Your Understanding Exercises July 22, 2013 Chapter 7 – 1, 6, 8 and 9 1. In the Deep Creek Mining Company example described in this chapter (Table 7.1), suppose again that labor is the variable input and capital is the fixed input. Specifically, assume that the firm owns a piece of equipment having a 500-bhp rating. a. Complete the following table: LABOR INPUT L (NO. OF WORKERS) | TOTAL PRODUCT TPL (= Q) | MARGINAL PRODUCT MPL | AVERAGE PRODUCT APL | 1 | 3 | - | 3 |
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Chapter 9 PROFIT MAXIMIZATION Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. 1 The Nature of Firms • A firm is an association of individuals who have organized themselves for the purpose of turning inputs into outputs • Different individuals will provide different types of inputs – the nature of the contractual relationship between the providers of inputs to a firm may be quite complicated 2 Contractual Relationships • Some contracts between
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