Q2B)By applying an appropriate method of optimisation, locate the quantity of components the firm should produce and the maximum profit it can earn per month Profit maximisation occurs at SMC=MR P=A+BQ MR=A+2BQ TVC = aQ + bQ2 + cQ3 AVC = a + bQ + cQ2 SMC = a + 2bQ + 3cQ2 Weekly TVC= 46Q – 0.0085 Q2 + 0.00001 Q3 Weekly AVC= 46 – 0.0085 Q + 0.00001 Q2 Weekly SMC = 46 – 2(0.0085 )Q + 3(0.00001) Q2 =46-0.017Q+0.00003Q2 Weekly demand (P) = A+BQ
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London 2012 Olympic Games Case 1. The core problem or issue in the case The core issue in this case is the “tradeoff decision between revenue generation and attendance”. Further, we can say that these issues are problematic like: * Maximizing ticket revenue without charging high price for it. * Peoples’ willingness to pay for specific event * Appeal of the sport (global and local) * Stage events (opening and closing ceremonies) * Particular team or athlete
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exactly what the cost of the last unit would be, but it’s not hard to find the average cost. To find this you would take the change in costs from a previous level divided by the change in quantity (MC=change in TC/change in q.) (Marginal cost, 2011) Profit is
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The Distinction Between Business And Economic Profit? The difference between the business and economic profit is that in economic profit, profit or loss is calculated by subtracting opportunity cost of the inputs used from the revenue of sales. On the other hand, accounting or business profit is the difference between the total revenue and total costs incurred to earn that revenue. Now, in business accounting normal return is the minimum profit that is required to cover the costs of inputs
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6/5/14 In this essay I will define terms of economics and explain their relationships. How a profit maximizing firm determines the level of output & the reaction to the level of marginal revenue will also be explained. Profit maximization is the process which determines the price & output level which the most profit will be made. The total revenue – total cost approach is based on the profit equals the revenue minus the total cost. The total revenue is the sum of the company’s sales of
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– Marginal Analysis The profit calculation of total revenue and total costs is Profit (P) equals total revenue (TR) minus total costs (TC) and focuses on maximizing this difference. Profit will be maximized when the total revenue, or the amount they would receive by selling that particular widget exceeds the total cost, or the costs associated with making this widget by the greatest amount. The greatest difference between these two is considered the profit.The profit calculation of marginal revenue
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Running head: MAXIMIZING PROFIT WITH MARGINAL ANALYSIS 1 Maximizing Profit with Marginal Analysis Timothy L. Gould Western Governors University MAXIMIZING PROFIT WITH MARGINAL ANALYSIS 2 Abstract In today’s market it is important to not only stay competitive but be able to grow with the market. In order to accomplish this, a company must pay close attention to its total revenue earned versus its total costs incurred. It must maximize
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so these are the items she would sell. If Julia clears at least $1,000 in profit for each game after paying all her expenses, she believes it will be worth leasing the booth. A. Formulate a linear programming model for this case. Decision Variables Representing “x1” as pizza slices, “x2” as hot dogs, and “x3” as barbeque sandwich The Objective Function The objective is to maximize total profit. Profit is calculated for each variable by subtracting cost from the selling price.
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on its supply curve so we have MR=P=$20,000 c) Compute the profit-maximizing level of output for Ajax Solution: The profit maximizing output is the output when MC=MR So we have 200Q-5000=20000 Q=125 d) Compute Ajax's total dollar profits Solution: Total Profits = Total revenue – Total cost Total revenue = P*Q = 20000*125=2,500,000 Total cost = 800000-5000*125+100*125*125 = 1,737,500 Total Profits = 762,500 #5.) a) The demand function can be written
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Diagnostics, Recommendations and Initiatives taken by Indian Railways 4 Outcome 5 Domain Analysis 7 Passengers Domain 7 Freight Domain 7 Other Domains 10 Parcel and Catering Services 10 Monopoly of Indian Railways – A welfare maximization firm 13 Revenue Maximization 14 Freight 14 Passenger 14 Others 14 Price Discrimination 15 First Level Price Discrimination 15 Second Level Price Discrimination 15 Third Level Price Discrimination 15 Auctions Applied in IR 16 Sealed first-price auction
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