between the average cost and marginal cost curve? Answer: We usually assume that the Average Cost curve is U shaped The MC curve will intercept the AC curves at its minimum point. When AC is decreasing‚ MC lies below AC - because when MC is below AC‚ producing an extra unit of output will pull down average cots When AC is increasing‚ MC lies above AC - because when MC is above AC‚ producing an extra unit of output will raise average costs Therefore MC will intercept the AC curve at its minimum point
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The cost recovery method does not recognize any income on a sale until the cost of the item sold has been fully recovered through cash receipts. Once the seller has recovered all costs‚ any subsequent cash receipts are included in income. The cost recovery method is used when the uncertainty of collection of the sales price is so great that even use of the installment method cannot be justified. Under the cost recovery method‚ both revenues and cost of sales are recognized at the point of sale
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Assignment 2 ECO 550 – Managerial Economics Question One Office building maintenance plans call for the stripping‚ waxing‚ and buffing of ceramic floor tiles. This work is contracted out to office maintenance firms‚ and both technology and labor requirements are very basic. Supply and demand conditions in this perfectly competitive service market in New York are: |QS = 2P - 20 |(Supply) | |QD = 80 - 2P
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Assignment 2: Operations Decisions Eco 550 Managerial Economics The purpose of this paper is to discuss the reasons why I‚ as a hired management consultant‚ would suggest a fictitious company either shut down operations or continue them based on its operational health. In order to do this I must first describe‚ in brief‚ the basic details of the company I have created to provide some tangibility to this assignment. Then I will assess the current environmental scan factors relevant to the decision
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• 1 The environment that is typically subject to much influence by the firm is remote industry OPERATING external • 2 What Human Resource component within its operating environment is a major element of a firm’s ability to satisfy its personnel needs? Labor union REPUTATION Benefit packages Employment rates • 3 When managers consider the general availability of credit‚ the level of disposable income‚ and the propensity of people to spend‚ they are considering what factors? Business
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Total assets $10‚688 100.0% Liabilities and stockholders’ equity Current liabilities $2‚584 24.2% Long-term liabilities 1‚079 10.1% Stockholders’ equity 7‚025 65.7% Total liabilities and stockholder’s equity $10‚688 100.0% Question 2 Here are the comparative income
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The average variable cost (AVC) in the short run and long run is ‘U’ shaped. Average variable cost is the total variable cost per unit of output‚ found by dividing total variable cost by the quantity of output. Thus if a firm produces X2 units of a commodity at a total variable cost of TVx2 the AVC of producing these two units of output is given as Average variable cost decreases with additional production at relatively small quantities of output and then eventually increases with relatively
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Running head: Cost Concepts‚ and Market Structure Proposal 1 Revenue‚ Cost Concepts‚ and Market Structure Proposal Melissa Hillyer University of Phoenix Economics 561 Dr. Kocharyan June 30‚ 2010 Revenue‚ Cost Concepts‚ and Market Structure Proposal 2 Abstract The following paper will analyzes Thomas Money Service scenario data and make recommendations to the company’s increasing revenue. This paper will analyze and determine how to fixed variable cost that should to maximize the profits‚ achieve
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Week 2 Assignment Topic | Answer | What factor caused movement along the supply curve in the simulation? | By decreasing the availability of the units to 28%‚ there was a surplus of 550 units available. | Please include the graph of a movement along the supply curve. Refer to our textbook please. | | What factor caused shift of the supply curve in the simulation? | The higher the price of the rental unit‚ the more the supply increased. This caused a movement along the supply line to curve
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The demand for your firm’s product is P = 78 - 15Q‚ where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. How much output should be produced in plant 1 in order to maximize profits? A. 1 B. 2 C. 3 D. 4 2. You are the manager of a firm that produces output in two plants. The demand for your firm’s product is P = 78 - 15Q‚ where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. What price
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