price takers. Marginal profit is equal to marginal revenue minus marginal cost. In the marginal revenue to marginal cost approach if the marginal revenue is greater than the marginal cost then the marginal profit is positive and if the marginal revenue is less than the marginal cost then the marginal profit is negative. The profit increases when the marginal revenue is almost equal to the marginal cost. Again the profit decreases when the marginal revenue is less than the marginal cost. Again profit
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Chapter 14 Firms in Competitive Markets MULTIPLE CHOICE 1. A firm has market power if it can a. maximize profits. b. minimize costs. c. influence the market price of the good it sells. d. hire as many workers as it needs at the prevailing wage rate. ANS: C PTS: 1 DIF: 1 REF: 14-0 NAT: Analytic LOC: Perfect competition TOP: Market power MSC: Definitional 2. A book store that has market power can a. influence the market price for the books it sells. b. minimize costs more efficiently
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with the marginal benefits > meaning marginal costs of doing it. (2) start doing something when the marginal benefits = marginal cost of doing it. (3) never do something when the marginal benefits < marginal costs of doing it. It can be easy wrongly conclude that marginal cost and total cost of the teams should always move in the same direction. That is, it total cost is rising, the marginal cost must be falling as well. To maximize the profit using marginal revenue and marginal cost, you
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Question 1 It's always important to set goals to measure the success of any business. However, the first three goals are more of a mission statement while the fourth is an objective for the company. The problem is there no plan and one objective. What is he going to do if the company doesn't net the $25,000? Or what if it nets the $25,000 but there is not enough cash to sustain the business? There needs to be more objectives to make allowances for these types of situations. There needs to
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MAIN ISSUE A part from reading the Danshui Plant No.2 case, we can see that there is no enough information to evaluate the performance of the pant for the first three contracts to assembly Apple iPhone 4. Analysis of the issue To get a clear picture a flexible budget was prepared for the month end of August 2010. (Shown in the table below) From the flexible that is prepared it can seen the performance of Danshui Plant NO.2 is not good enough as what it suppose to be. The budget show that Danshui
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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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Wilkerson Case Report * Contents Executive Summary 2 Competitive situation faced by Wilkerson 2 Wilkerson’s Existing Costing System Limitation & Possibility of Activity Based Costing 4 Cost Driver and rates under Activity-based Costing 6 Implication and Recommendations 8 Valves 8 Pumps 9 Flow controllers 9 Executive Summary Wilkerson traditional costing system seems to be too simplified. Using a single allocation base to allocate manufacturing overhead cost has understated
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Major Assignment 1) a) Demand Function: Quantity Demanded (Qd) = a + b* Price (P) Supply Function: Quantity Supplied (Qs) = a + b* Price (P) Where: a = constant b = the change in quantity as a result to the change in price. Demand Function: Quantity Demanded (Qd) = a + b* Price (P) b = (420 – 350) / (20 – 25) = 70 / -5 = -14 Using: P = 25, Qd = 350 350 = a – 14 * (25) 350 = a – 350 Therefore a = 700 and the demand function would be: Qd = 700 – 14 * P Supply Function:
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inventory (planned) = N/A * Work days per month = 20 days * Regular time work hours = 8 per day * Overtime work hours ≤ 40 per month Item | Cost | Materials | $12/unit | Inventory holding cost | $2/unit/month | Marginal cost of a stockout | $10/unit/month | Hiring and training costs | $3000/worker | Layoff cost | $5000/worker | Labor hours required | .25/unit | Regular time cost | $15/hour | Over time cost | $22.50/hour | Cost of subcontracting
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A New House Decision Alycia Toth XECO/212 Professor Tsilis Purchasing a home is not only one of the most important decisions but it is also one of the biggest decisions a person can make in their life. There are so many factors that come into play when making that final decision. Before you can make a final decision on which home to purchase you have to make the decision to buy a home. My husband and I have accepted the challenge of making the final decision on whether to purchase a home or
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