Cost Allocation Example Cost Allocation Example Overhead rate: 1/20 = 0.05 • • • • • Consider a family that does nothing else than eating toast $0.3 per toast (direct cost) Utility bill: $1 What is the allocation base? What is the overhead rate? Number of Toasts Adam 9 2.7 0.05 0.45 3.15 7 2.1 0.05 0.35 2.45 Connie 4 1.2 0.05 0.20 1.4 What happens if the utility bill increases because now the family not only eats toast but watches
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Internet business. What will be your fixed and variable costs? Briefly discuss. 5. Explain the shape of the long-run average cost curve. How firms use the long-run cost curve to make choices about production? 6. What is the relationship between marginal cost and average cost? Briefly explain. 7. What distinguishes a firm's short run period from its long run priod? Briefly explain. 8. As a farmer, you must decide how many times during the year to plant a new crop. Also, you must decide how
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Business Economics Contributors: Prof. Dr. S.S Haridas Prof. Bidhan Datta Prof. Kavita Ingale Prof. Neelkanth Athalye Prof. Dr. Manasi Gore Session Plan SR. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Business Economics (102) Topic Thinking like an Economist & Ten Principles of Economics Circular Flow, National Income, Measurement Identities Business cycle, Indian & Global Experience Types of Inflation (Demand Pull & Cost Push) Inflation & Unemployment
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Ludibina Rivas ECON 2302 Spring 2015 Course Learning Outcome #3 Activity Restaurant are willing to offer all you-can-eat buffet meals and still make money from customers because of the law of diminishing marginal utility. This law states that the more of a good you consume per period, the smaller the increase in your additional consumption (McEachern). This is what helps restaurants make money from buffets. When a person goes into a restaurant that offers a buffet they are ready to eat
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you made in which you, at least implicitly, weighed marginal cost and marginal benefit. LO1 Answer: Student answers will vary, but may include the decision to come to class, to skip breakfast to get a few extra minutes of sleep, to attend college, or to make a purchase. Marginal benefits of attending class may include the acquisition of knowledge, participation in discussion, and better preparation for an upcoming examination. Marginal costs may include lost opportunities for sleep, meals
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produce 190 pizzas per worker. What number of workers appears to minimize the marginal cost of pizza production assuming that each pizza worker is paid $500 per week? Ans.Six number of workers minimize the marginal cost of pizza production. The cost at this level will be 2.63$ at this level. Why would marginal productivity decline when you hire more workers in the short run after a certain level? Ans. The marginal productivity declines as the number of ovens is limited at 4. Till 6 workers
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Basic Monopoly, First & Second Degree Price Discrimination Suppose you know the following about an industry that is a monopoly. Market Demand: P = 200 - .5Q Marginal Cost = 40 There are no fixed costs a) What is the marginal revenue curve for this monopoly? b) Find the profit maximizing quantity for this monopolist if it charges a single price for the good. c) Find the profit maximizing price for this monopolist if it charges a single price for the good. d) What do profits equal for this
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efficient output level is considered through marginal revenue, and marginal cost. The point at which profit is being maximized is when the revenue gained from selling one additional unit is equal to the cost of producing the unit. At this point, the firm is receiving an average rate of return at the highest output level possible. For example, a shoe producer pays $25 to produce one shoe and can sell the shoe for $50. At this output level the marginal profit is $25 and the profit maximization rule
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In a short-run production function, total product, average product, and marginal product changes as total product and labor increases. The total product increases rapidly up to 6.666 units of labor. This means that marginal product is increasing over the range of production when one additional unit of labor is added. While total product is increasing between 6.666 units of labor and 14 units of labor marginal product is decreasing. When a total of 14 labor units are used, total product has then reached
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Business Proposal Randy Sickmier ECO/561 September 28, 2011 Dave Sella-Villa Business Proposal This business proposal targets a new market for personal computers; senior citizens. No computer company offers a product designed exclusively for the baby boomer (“Boomer”) generation. There are “senior friendly” computers available from most of the major manufacturers, but none make a full commitment to “senior only” features. The market for computers designed to meet the unique needs of senior
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