is an increase in price over the average marginal cost (the difference between p1 and the point vertically down from there that cuts the MC curve) Profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this definition. 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
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description of a competitive firm’s supply curve is as follows: The competitive firm’s short-run supply curve is that portion of the a. average total cost curve that lies above marginal cost. b. average variable cost curve that lies above marginal cost. c. marginal cost curve that lies above average total cost. d. marginal cost curve that lies above average variable cost. 2 Name: ________________________
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UNIT II: UTILITY ANALYSISConcept of Utility * For effective decision-making‚ businessmen have to analyze and understand consumer behavior. Every rational human being endeavors to maximize his total utility by selecting the best from the given set of alternatives. * Utility refers to the satisfaction or pleasure that a consumer obtains by consuming the product or service; or want-satisfying ability of a good or service. * The concept of utility has been developed to explain the basic principles
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Name: ________________________ Class: ___________________ Date: __________ ID: A CH 12 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ ____ ____ ____ ____ 1. The fundamental goal of a firm is a. different for each firm. b. to make a quality product. c. to maximize profit. d. to gain market share. e. decrease its employment of workers in order to cut its costs. 2. Lauren runs a chili restaurant in San Francisco. Her total revenue last
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Questions for Critical Thinking 1 Liberty University Business 620/ Global Economic Environment Salvatore’s Chapter 1: Discussion Question 9. How is the concept of a normal return on investment related to the distinction between business and economic profit? There is no normal return on investment. To be considered a return on investment‚ the internal rate of return should exceed the cost of capital. A low risk‚ ongoing enterprise might be satisfied with an IRR= 7-10%‚ while a
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method to generate and dispatch electricity to its customers. This automated Load dispatching method is also known as the “Early Bird” system. The “Early Bird” continuously calculates the marginal cost of delivering additional Kilowatts of electricity to its customers anywhere in the company service area. Marginal cost can be understood as the change in total cost that arises when the quantity produced (power in this case) changes by one unit. Sothern Company has several power generating units.
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Team D Week Two Learning Reflection ECO/365 February 25th‚ 2013 Team D Week Two Learning Reflection 2.1- The relationship between the number of inputs and the law of diminishing marginal productivity is that as more input is added to an existing fixed input‚ eventually the additional output one gets from that additional input will fall. As input is increasing and a company hires more workers to increase‚ eventually it will fall and a company wants to try to stay out of that range. 2.2 –
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Figure 10-1 [pic] a) Refer to Figure 10-1. The marginal product of the 3rd worker is ______ b) Refer to Figure 10-1. The marginal product of the 7th worker is ______ c) Refer to Figure 10-1. The average product of the 4th worker ______ d) Diminishing marginal productivity sets in after ______ 15) If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units‚ then the average product of 12 workers is ______ 16) If 11 workers
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Management Accounting Absorption vs Marginal Costing Report 20813287 Absorption vs. Marginal Costing (Atmospheric Ltd) Contents Page No Memorandum 3 Marginal (Variable) Costing 4 Absorption
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1 Chapter 4.1 Marginal Functions in Economics ___________ Cost: Suppose that C ( x ) describes the cost function for producing x number of a certain product. Then the ___________ cost is the derivative of the cost function‚ C ( x) ‚ and measures the rate of ________ of the cost function ______________ the number of units ______________. Note 1: The marginal cost for a particular value of x is the ___________ cost of one __________ unit of production. ___________ Revenue Function: R( x) px
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