Marginal Revenue: Marginal Revenue can be termed as the change in the total revenue from an additional unit that is sold by a firm. Example‚ the total revenue when 10 units are sold is $50‚ and total revenue when 11 units are sold is $55. Marginal Revenue in this case will be (55-50)/(11-10) = $5. One can compute the total revenue if the marginal revue and the number of units sold. If the marginal revenue of a product is zero than the total revenue will not change with an increase in the number
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Marginal Analysis Economics & Global Business Applications‚ EGT 1‚ Task 1 A. Explanation of profit maximization The total revenue‚ TR‚ is the overall amount of all sources of a business’s income. It consists of total sales or profit‚ over a period of time. The TR can be calculated by taking the price and multiplying it by the quantity. For example‚ if a business decides to retail another product and the total revenue does increase‚ thus the marginal revenue would be greater than zero
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Justification of the huge salaries paid to some top athletes; an economic perspective. Over the last century there has been much research into the area of Labour Economics‚ and hence the determinants of supply‚ demand and wages for labour. In this essay‚ I will be looking at the unique example of the Sports Labour Market with specific focus on the European Football Market‚ and use various economic models to justify the huge salaries currently offered to top athletes within this field. The
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Objectives After going through this chapter you shall be able to understand the following concepts Consumer Behaviour Theory- Ordinal Approach and Cardinal Approach Total Utility‚ Marginal Utility‚ Relationship between Total Utility and Marginal Utility Law of Diminishing Marginal Utility Utility Analysis and Consumer Equilibrium- One Good Case and Two Goods Case Consumer- Who is a Consumer? Anyone who purchases and consumes any goods and services for the satisfaction of his/her wants
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businesses often react to marginal revenue of varying levels. The definition of Marginal revenue is the extra revenue that will be made when one additional unit of any given product is sold. The sum of sales or a pre-determined quantity of a particular product is called total revenue. “Marginal revenue tells a firm how much additional money selling each additional product will gross; total revenue tells a firm how much they will make by selling any given quantity. Marginal cost is the cost a firm
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amount of output to produce by finding the quantity at which marginal revenue equals marginal cost. It finds the price to charge by finding the point on the demand curve that corresponds to that quantity. 3. A monopolist produces a quantity of output that is less than the quantity of output that maximizes total surplus because it produces the quantity at which marginal cost equals marginal revenue rather than the quantity at which marginal cost equals price. This lower production level leads to a deadweight
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function for a product sold by an oligopolist is given below: QD = 370 – P The firm’s marginal cost function is given below: MC = 10 + 4Q Calculate the equilibrium price and quantity. Solution: P = 370 – Q so TR = 370Q – Q2 and MR = 370 – 2Q MR = 370 – 2Q = 10 + 4Q = MC so Q = 60 and P = 310 2. The demand function for a product sold by an oligopolist is given below: QD = 135 – 0.5P The firm’s marginal cost function is given below: MC = 30 + 4Q Calculate the equilibrium price and quantity
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Comparing total revenue to total cost or marginal revenue to marginal costs B. Comparing average revenue to average costs or marginal revenue to marginal costs C. Comparing average variable costs to price or marginal revenue to price D. Comparing total revenue to average variable costs or price to average variable costs 3. Suppose that a firm determines that its marginal revenue is greater than its marginal cost‚ it would be better to Hint : Remember‚ marginal revenue is the change in revenue received
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loses €40.000 in a year. 4. It’s not a good idea for her to open the pub. 2. A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: a) What is the marginal product of each hour spent fishing? Hours Kg of fish Marginal product 0 0 10 1 10 8 2 18 6 3 24 4 4 28 2 5 30 c) Use these data to graph the fisherman’s production function. Explain its shape. MPL equals the slope of the production function. The function
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produce enough quantity until their marginal revenue equals marginal cost (MR=MC). Currently‚ marginal costs are above marginal costs‚ causing a decline in profits. Equilibrium was determined through graphing both marginal revenue and marginal costs. The equilibrium occurs when the company produces an output of 7 with marginal costs of $88 and marginal revenue of $14‚000. It is apparent that the company is not a monopoly because marginal revenue would always equal marginal costs (Perloff‚ 2007). Another
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