Name: Thuy Anh Nguyen November 6‚2012 1. Conditions for profit maximization are: a) Difference between total revenue (TR) and total cost (TC) is maximized; b) Marginal revenue (MR) should be equal to marginal cost (MC) Explanations: If we assume that the company is facing a downward – sloping curve and it produces just one single product a) Profit = TR – TC. Profit will increase if TR increases and TC decreases. If company wants profit maximization‚ it should be TR maximization and TC minimization
Premium Profit maximization Economics
2) Explain why a profit maximizing firm produces the output that equates marginal revenues to marginal costs (MR=MC). In a perfectly competitive market‚ producers are price-takers and consumers are price-takers. There are many producers‚ none having a large market share and the industry produces a standardized product‚ also free entry and exit of the industry. They produce using the optimal output rule: produce where marginal revenue equals marginal cost as Smith (1904) demonstrated. Figure
Free Economics Perfect competition Monopoly
or not. Profit maximisation Profit maximisation is the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue - total cost method relies on the fact that profit equals revenue minus cost‚ and the marginal revenue - marginal cost method is based on the fact that total profit in a perfectly competitive market reaches its maximum point where marginal revenue equals marginal cost. Basic definitions
Premium Profit maximization Economics Marginal cost
A01- Profit and Loss A profit and loss account is something businesses use to show them their revenue‚ costs and profits for that certain year‚ therefore showing the total amount of profit that the business has made that year‚ it is extremely important for the business‚ in particular for the accounts department who will refer to the profit and loss account a lot. This is because it clearly lays out what the business has spent‚ and what the business has brought in‚ it is easy for the business
Premium Generally Accepted Accounting Principles Income statement Revenue
For-Profit Education For-Profit education has been present for many years however has recently become a popular commodity. The for-profit educational world has been gaining popularity for a number of reasons. These include such aspects as access‚ student population‚ financial cost‚ etc. This paper will explore For-Profit education‚ a brief history‚ the students these institutions aim to serve‚ the intended focus of For-Profits and quality‚ the impact on higher education‚ and the roles of student
Premium University Education Higher education
Profit Maximization Marginal revenue is the change in revenue which comes from the sale of an additional unit of output. The relationship with total revenue is that total revenue is used in the formula to calculate marginal revenue. A company can calculate marginal revenue by dividing the change in total revenue with the change in output quantity. Because of demand‚ as production quantity increases the revenue per unit will decrease. On the other hand‚ marginal cost is the change in the total
Premium Profit maximization Marginal cost
Theories of Profit There are various theories of profit‚ given by several economists‚ which are as follows: 1. Walker’s Theory of Profit as Rent of Ability This theory is pounded by F.A. Walker. According to Walker‚ “Profit is the rent of exceptional abilities that an entrepreneur may possess over others”. Rent is the difference between the yields of the least and the most efficient entrepreneurs. In formulating this theory‚ Walker assumed a state of perfect completion in which all firms are
Premium Entrepreneurship Entrepreneur Economics
33yd | Lab. Manual: Length | 271cm | 2.71m | 10.20in | 0.28yd | Lab. Manual: Width | 208cm | 2.08m | 8.60in | 0.24yd | B. Graduated Cylinder Volume reading when graduated cylinder is half filled with | (mL) | Potassium permanganate(KMnO4) | 12.6mL | Distilled Water (H2O) | 12.3mL | | Capacity of Apparatus (maximum volume contained) | Big test tube | 18.8mL | 250-mL Beaker | 50mL | C. Pipette Pipettes | Drawing of a part of the scale | Accuracysmallest known
Premium Volume Density Water
Assignment: Maximizing Profits in Market Structures Paper XECO/212 University of Phoenix The structure of a market is defined by the number of firms in the market‚ the existence or otherwise of barriers to entry of new firms‚ and the interdependence among firms in determining pricing and output to maximize profits. This paper covers the following: the advantages and limitation of supply and demand‚ the characteristics of each market structure‚ the barriers to entry and how
Premium Economics Monopoly Perfect competition
The volume of one mole of gas under conditions of room temperature and pressure Data collection and processing Quantitative data in table with units and uncertainties | Mass of Magnesium(Mg) (g) | Volume of Hydrogen (H₂) (cm³) | 1st trial | 0.040 | 39.9 | 2nd trial | 0.040 | 40.3 | 3rd trial | 0.035 | 36.5 | Quantitative data: The Magnesium was silvery-white‚ lustrous and relatively flexible before being placed in the burette. Whilst reacting with the hydrochloric acid‚ it dissolved
Premium Chlorine Chemistry Chemical reaction