Chapter 19: Profit Maximization Problem Instructor: Hiroki Watanabe Summer 2009 1 / 49 Intro SPMP Comparative Statics LPMP Factor Demand Returns to Scale Σ 1 2 3 4 5 6 7 Introduction Overview Short-Run Profit Maximization Problem Definitions Short-Run Profit Maximization Problem Solution to Short-Run Profit Maximization Problem Example Interpretation Comparative Statics Long-Run Profit Maximization Problem Solution to Long-Run Profit Maximization Problem Tangency
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conditions. Some writers have called attention to the incongruency between bureaucratic and professional norms (Crozier & Friedberg‚ 2010; Etzioni - Halevy‚ 2010) . Specifically‚ they argue that occupants of hierarchical positions frequently do not have the technical competence to make decisions about issues that i nvolve professional knowledge. That is‚ there is a basic conflict in educational organizations between au thority based on bureaucracy and authority based on professional
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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
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Sales Maximization A reasonable‚ and often pursued objective of firms is to maximize sales‚ that is‚ to sell as much output as possible. Clearly sales lead to revenue‚ meaning that maximizing sales is also bound to maximize revenue. But as the analysis of short-run production indicates‚ maximizing sales does NOT necessarily maximize profit. So why do firms do it? Are firms unreasonable? Are they irrational? Do they NOT understand the basic economic principles of short-run production? For some firms
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1) Distinguish between the FTP and TELNET protocols. File Transfer Protocol (FTP) is used to transfer text files‚ programs‚ spreadsheets‚ and databases across the Internet. TELNET is a terminal emulation protocol used on TCP/IP-based networks. It allows users to run programs and review data from a remote terminal or computer. TELNET is an inherent part of the TCP/IP communications protocol. While both protocols deal with data transfer‚ FTP is useful for perusing a file of data as if the user were
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ECON 600 Lecture 3: Profit Maximization I. The Concept of Profit Maximization Profit is defined as total revenue minus total cost. Π = TR – TC (We use Π to stand for profit because we use P for something else: price.) Total revenue simply means the total amount of money that the firm receives from sales of its product or other sources. Total cost means the cost of all factors of production. But – and this is crucial – we have to think in terms of opportunity cost‚ not just explicit
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QUIZ LP Formulation 1. ACME Co. is a manufacturer of X’s which they sell to OR/MS teachers to be used as variables. For this week they intend to manufacture two types of X’s‚ namely‚ X1’s & X2’s. The profit contribution for each unit of X1 & X2 are $4 and $5‚ respectively. Mr. Loony‚ the manager of ACME‚ found out that his available supply of raw material 1 (RM1) and raw material 2 (RM2) are 18 units and 24‚ respectively. Each unit of X1 will require 3 units of RM1 and 3 units of RM2 while
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Distinguish between futures and forward contract Futures contract A futures contract is a contractual agreement‚ generally made on the trading floor of a futures exchange‚ to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts feature the quality and quantity of the underlying asset‚ they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset‚ while others
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PAGE NO.121(CHAPTER-9 CHEMISTRY PRACTICALS) Q4.How would you distinguish between the following: a)Calcium nitrate and lead nitrate using ammonium hydroxide Ans: Add ammonium hydroxide to the given substance‚ calcium nitrate does not form any ppt. with ammonium hydroxide. But lead nitrate forms chalky white ppt. With ammonium hydroxide b)Calcium nitrate and lead nitrate using sodium hydroxide solution Ans: Add sodium hydroxide to the given substance‚ Calcium nitrate forms milky white ppt
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respectively. Nissan must produce exactly 1‚000 cars. At least 300 must be produced at plant 3. No more than 500 must be produced at plant 1. Labour hours available are at most 3‚300‚ while raw material availability does not exceed 4000. Formulate an LP using the template given and solve in Excel to enable Nissan Motors to minimize the cost of production 20 marks (15 marks to formulate and 5 marks to solve in excel) . Question 1B The Southfork Feed Company makes a feed mix from four ingredients
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