Global Economics & Global Business Applications
EGT1 Economics & Global Business Applications (V1 UG 0213)-PA
Name: Christopher Talag
Student Number: 274350
Task 1:
A. Explain profit maximization from the following approaches: Profit maximization can be explained according to the following approaches according to McConnell (2012):
1. Total revenue to total cost - profit maximization is achieved when the difference of the total revenue minus the total cost is at the highest point.
2. Marginal revenue to marginal cost - means that profit maximization occurs when marginal revenue and marginal cost are equal. Marginal cost is the change in total cost as output changes by one unit. The change in total revenue from the sale of one additional unit. B. Explain the calculation used
to determine marginal revenue.
1. Discuss how marginal revenue increases, decreases, or remains constant in the given scenario. The marginal revenue based on the given scenario is calculated change in total revenue divided by change in output quantity. The result in the given scenario shows that the marginal revenue will decrease.
C. Explain the calculation used to determine marginal cost.
1. Discuss how marginal cost increases, decreases, or remains constant in the given scenario. Based on McConnell (2012) The formula for marginal cost is change in total cost divided by change in quantity. Based on the given scenario, the marginal cost increases. D. Explain where profit-maximization occurs for Company A using the chart provided in the given scenario. Based on the given scenario, profit maximization is achieved if widget will be produced or sold by eights where profit revenue is $540. This where the marginal cost and revenue is equal.
E. Explain what action should be taken in terms of adjusting output if it is determined that marginal revenue is greater than marginal cost. The marginal revenue is greater than the marginal cost like in the given scenario 7, the company should increase their quantity of widgets to enhance profit. F. Explain what action should be taken in terms of adjusting output if it is determined that marginal cost is greater than marginal revenue. In the given scenario where there are 9 units, the marginal cost is greater the marginal revenue, the company should reduce the quantity of number of widgets in order to maximize profit.
References
McConnell, C. R., & Brue, S. L., Flynn, S. (2012). Economics (19e). McGraw-Hill
Name: Christopher Talag
Student Number: 274350
Task 1:
A. Explain profit maximization from the following approaches: Profit maximization can be explained according to the following approaches according to McConnell (2012):
1. Total revenue to total cost - profit maximization is achieved when the difference of the total revenue minus the total cost is at the highest point.
2. Marginal revenue to marginal cost - means that profit maximization occurs when marginal revenue and marginal cost are equal. Marginal cost is the change in total cost as output changes by one unit. The change in total revenue from the sale of one additional unit. B. Explain the calculation used
to determine marginal revenue.
1. Discuss how marginal revenue increases, decreases, or remains constant in the given scenario. The marginal revenue based on the given scenario is calculated change in total revenue divided by change in output quantity. The result in the given scenario shows that the marginal revenue will decrease.
C. Explain the calculation used to determine marginal cost.
1. Discuss how marginal cost increases, decreases, or remains constant in the given scenario. Based on McConnell (2012) The formula for marginal cost is change in total cost divided by change in quantity. Based on the given scenario, the marginal cost increases. D. Explain where profit-maximization occurs for Company A using the chart provided in the given scenario. Based on the given scenario, profit maximization is achieved if widget will be produced or sold by eights where profit revenue is $540. This where the marginal cost and revenue is equal.
E. Explain what action should be taken in terms of adjusting output if it is determined that marginal revenue is greater than marginal cost. The marginal revenue is greater than the marginal cost like in the given scenario 7, the company should increase their quantity of widgets to enhance profit. F. Explain what action should be taken in terms of adjusting output if it is determined that marginal cost is greater than marginal revenue. In the given scenario where there are 9 units, the marginal cost is greater the marginal revenue, the company should reduce the quantity of number of widgets in order to maximize profit.
References
McConnell, C. R., & Brue, S. L., Flynn, S. (2012). Economics (19e). McGraw-Hill