Question 2. Compare the value of a calf to the cost of maintaining the cow as an alternative means of determining appropriate cow size. Hint: Calculate marginal revenue and marginal expense. Which method (50% weaning rule or marginal analysis) do you think provides the best measure? Why? Answer: The most appropriate method that is used to compare a calf value to the cost of maintaining the cow is the marginal analysis as it gives the marginal revenue that is calculated as changes in the revenue
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as it reflects to the current market structure and then take into account the expected changes to the selling environment and factors that may have caused the change. I will also examine chief short-run and long-run production and cost functions as applied to this new cost data to determine if there are conditions under which operations could be discontinued. Given the change in the market structure they we be a need to review the pricing structure so as to maximize profits. Finally, I will proposes
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brand: please think about what you are saying about yourself when you do any work for someone else! 1. Consider a monopolist where the market demand curve for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50. a. Given the above information, what is this monopolist’s profit maximizing price and output if it charges a single price? Answer: MR = 520 – 4Q MC = 100 + 2Q 520
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approaches: 1. Total revenue to total cost: Profit maximization occurs when total cost is subtracted from total revenue. The area where the largest gap occurs is where the greatest profit maximization occurs. 2. Marginal revenue to marginal cost: Profit maximization occurs when marginal revenue is equal to marginal cost. B. Explain the calculation used to determine marginal revenue. The calculation for marginal revenue is MR = ∆TR/∆Q (marginal revenue is equal to the change in total
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The Costs of Production Facing a Company Ariel Williams, Samir Soliman ECO561 July 20, 2015 Peter Oburu Outline * In the short run, the total cost of any level of output is the sum of fixed and variable costs (TC = TFC + TVC). * Average fixed, average variable, and average total costs are fixed, variable, and total costs per unit of output; marginal cost is the extra cost of producing one more unit of output. * Average fixed cost declines continuously as output increases; average-variable-cost
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Business Proposal for Johnson and Johnson ECOX/561 October 7, 2013 Karen Yancey Business Proposal for Johnson and Johnson Johnson and Johnson is a multinational medical devices, pharmaceutical, and consumer packaged goods company founded in 1886 by three brothers: Robert Wood Johnson, James Wood Johnson, and Edward Mead Johnson (Johnson and Johnson , 2013). In this business proposal the focus will be on consumer packaged goods for Johnson and Johnson. A discussion
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$200. b. For firms in perfect competition, marginal revenue and average revenue are equal. Since profit maximization also implies that marginal revenue is equal to marginal cost, marginal cost must be $10. c. Average fixed cost is equal to AFC /Q which is $200/100 = $2. Since average variable cost is equal to average total cost minus average fixed cost, AVC = $8 - $2 = $6. d. Since average total cost is less than marginal cost, average total cost must be rising. Therefore, the efficient scale
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Cite three examples of recent decisions that you made in which you weighed marginal cost and marginal benefit. The economic perspective focuses largely on marginal analysis—comparisons of marginal benefits and marginal costs. To economists, “marginal” means “extra,” “additional,” or “a change in.” Most choices or decisions involve changes in the status quo, meaning the existing state of affairs. For instance, should you attend school for another year? Should you study an extra hour for an exam
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total cost. Total revenue, is what the widget(s) sells for. Total cost, is what costs to produce the widget(s).The profit maximization is where marginal revenue equals marginal cost. B. Marginal revenue is the additional revenue that will be made by Company A when it sells one additional unit of a product. C. Marginal cost is what it will cost Company A to produce one additional unit of product. D. The profit maximization occurs for company A at Q-8, both the Marginal Revenue, and Marginal Cost
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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 $_____
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