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
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Optimal Model for Health Care Stephanie Fontes ECON 402—Wednesday’s Class Due Date: November 2nd‚ 2011 What is an optimal model for health care? This is a highly debated issue internationally. Much of the debate centers around whether health care should be treated as a type of public—good supplied by the government and funded by taxpayers. Others believe that a better system is delivered by the private sector. Another model advocates a public/private mix. This analysis will consider
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The marginal or neglected can be seen to refer to individuals‚ a class or nation‚ to ideas that have been marginalised‚ to neglected forms such as poetry‚ and to the marginalised self. Philip Larkin is renowned for his use of the colloquial in his poetry‚ and he renews the importance of everyday language and words‚ that have been neglected and marginalised in forms of expression. His poems have the tone of the ordinary day. Through this use of language‚ he reflects on the loss of identity and to
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which firms compete according to output. Hence‚ discuss the contention that non-collusion is the inevitable outcome of oligopoly. (2000 words) ‘Oligopoly is an industry structure characterized by a few firms producing all‚ or most‚ of the output of some good that may or may not be differentiated.book’ An oligopoly lies somewhere in between a monopoly (only one seller) and competition (many sellers). Firms are said to exhibit ‘strong mutual interdependence‚’ meaning that an action by one firm is
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parents that he uses to purchase two goods: Pokemon cards (which cost $5 per pack) and comic books (which cost $4 each). Draw Yap’s budget constraint. Show what would happen if Yap’s parents lower his allowance to $15 per week. Does the opportunity cost of a comic book change? The budget constraints are shown below. When Yaps allowance falls‚ the budgetconstraint shifts in but keeps the same slope. The opportunity cost of a comic book isunaffected. It is equal to 4/5 of a pack of
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general form of a linear function involving five independent variables. (2) Assume that the salesperson in Example 1 (page 177) has a salary goal of $800 per week. If product B is not available one week‚ how many units of product A must be sold to meet the salary goal? If product A is unavailable‚ how many units be sold of product B? (3) Assume in Example 1 (page 177) that the salesperson receives a bonus when combined sales from the two products exceed 80 units. The bonus is $2.50 per unit for each
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Cost‚ Volume‚ and Profit Formulas Heather Jauregui University of Phoenix of Axia College “The Cost-volume-profit (CVP) analysis is the study of the effects of changes in costs and volume on a company’s profits.” (Kimmel‚ P.‚ Weygandt‚ J.‚ & Kieso‚ D. 2003) The analysis is used to maximize efficiency in a business. In order to be effective the CVP analysis has to make several assumptions. These assumptions are that the costs can be fitted into either fixed or variable categories. The
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Cost Per Output and Cost Per Outcome Response Cost per outcome is the total cost of all units of service. Very simply‚ if you don’t know what it costs to achieve a certain output/outcome‚ you can’t know how much to charge for your services. A budget systems model is the foundation from which budgeting systems can be used to evaluate the success of an agency or company. Human Service Agencies receive pay based on how many people are helped‚ taking into account the cost of providing the services
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provided with current demand‚ current operating capacity‚ fixed costs‚ variable costs and other ancillary information. It was also brought to our attention that presently the Company is catering the demand of its product W within a local community. However the Company wishes to analyse the implications if a decision is made in respect of launching product W at the state level. As a consulting firm‚ we will perform a cost-volume-profit [CVP] analysis whereby we will examine where the Company stands
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The cost profit analysis (CVP) determines how cost and volume affect a company’s operating income. To successfully perform the analysis the five basic components have to be known. The components are volume or level of activity‚ unit selling prices‚ variable cost per unit‚ total fixed cost‚ and sales mix. Volume or level of activity is how many units are produced or sold. The unit selling prices are the cost that each unit produced is sold or thought to be sold will sale for. The variable cost per
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