maximization occurs when marginal cost equals marginal revenue. B. Explain the calculation used to determine marginal revenue. 1. Discuss how marginal revenue increases, decreases, or remains constant in the given scenario. Marginal Revenue is calculated by the change in total revenue from producing an additional unit of output. The marginal revenue in the given scenario decreases. Each time the change in total revenue is divided by the increasing unit of output the marginal revenue decreases by $10
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c. The analysis revealed that the overhead costs should be evenly assigned to two cost pools. Determine the cost per unit for each type of chair using two cost pools. There are two activities in this scenario: labor hours and machine hours. Let's say that overhead is divided evenly between these two activities, $125,000 is assigned to labor hours and $125,000 is assigned to machine hours. Overhead Overhead Labor Overhead
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Monopoly against Competition Introduction Monopoly, according to the Macmillan Dictionary (2009): “a company that has complete control of the product or service it provides because it is the only company that provides it”. And, as a matter of fact, a monopole firm will charge prices well above of the production costs and reap profits much further than a normal interest return on investment. In short, it is the opposite of a competitive market in terms of the number of sellers and degree of competition
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of units. When a business is producing at the lowest average cost achievable, this is known as the optimum output. This can be shown by the diagram below: Marginal costs are defined as the change in total costs resulting from a one unit change in output. They are the variable costs associated with increasing output in the short run. Marginal fixed costs will be zero as fixed costs do not change with output. This can be shown by the diagram below: 2. An oligopoly is a particular market in which
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3/26/09 Case 4 Better Care Clinic (Breakeven Analysis) Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospitals serving the same general population, Fairbanks historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care
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1. EXERCISES – LECTURE 2 1. QUESTION: Find point price elasticity, point income elasticity and point cross-price elasticity at P=10, Y=20, and Ps=9, if the demand function were estimated to be: Qd = 90 – 8.P + 2.Y + 2.Ps Is the demand for this product elastic or inelastic? Is it a luxury or a necessity? Does this product have a close substitute or complement? Find the point elasticity of demand. 2. ANSWER: | | |
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‘C’ Page 2 Economics for Managers Assignment Assignment: A Q.1. What are indifference curves? Explain the consumers’ equilibrium under the assumptions of ordinal approach. Q.2. Examine the concept and relationship of Total, Average and marginal costs with the help of suitable diagram. Q.3. Differentiate and elaborate the concepts of returns to scale and law of variable proportions. Q.4. Why is demand forecasting essential? What are the possible consequences if a large scale firm places
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they rise as output rises. Total costs start at fixed cost and slope upwards in the same shape as variable cost as it is a sum of the two costs combined. The other costs which Sony will need to consider are its Average Total Cost (ATC) and its Marginal Cost (MC). Average cost can be defined as cost per unit sold. As production is increased and more workers are employed, productivity is likely to rise. If workers specialise in particular tasks their efficiency or productivity in these tasks will
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terms of sub-products. One key weakness of TiVo is that it seeks to provide too many benefits. Some of these benefits may be deemed unimportant by specific customer segments. If the cost (and therefore the price) can be reduced by eliminating these marginal benefits, then the value proposition will increase and also will be clear. The three different core benefits of TiVo are (i) recording (ii) reviewing (like replay, pause, etc.) and (iii) optimizing, which can be satisfied by three different products
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Need Answer Sheet of this Question paper, contact aravind.banakar@gmail.com www.mbacasestudyanswers.com ARAVIND – 09901366442 – 09902787224 Cost and Management Accounting 1. X is the manufacture of Mumbai purchased three chemicals A, B and C from U.P.The bill gave the following information: Chemical A: 6000 kgs @ Rs. 4.20 per kg Rs 25,200 Chemical B: 10000 kgs @ Rs. 3.80 per kg 38,000 Chemical C: 4000 kgs @ Rs. 4.75 per kg 19,000 VAT 2,055 Railway
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