Unit 7 P1 Direct costs A cost that can be directly related to producing specific goods or performing a specific service. For example‚ the wages of an employee engaged in producing a product can be attributed directly to the cost of manufacturing that product. Variable costs Variable costs means the cost of production (cost of labour‚ material or overhead) that change according to the change in the volume of production units. Combined with fixed costs‚ variable costs make up the total cost of
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cost. b. marginal revenue equals marginal cost. c. price equals average total cost. d. price equals marginal cost. 3. In the long run‚ neither competitive price takers nor competitive price searchers will be able to earn economic profits because a. entry barriers into these markets are high‚ raising the costs of each firm. b. the government will dictate moderate prices for these firms. c. competition will force prices down to the level of per-unit production costs. d. marginal revenue
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perfectly competitive firm ’s supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes its profits by choosing to supply the level of output where its marginal revenue equals its marginal cost. When marginal revenue exceeds marginal cost‚ the firm can earn greater profits by increasing its output. When marginal revenue is below marginal cost‚ the firm is losing money‚
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Chapter 9 1. All firms‚ no matter what type of firm structure they are producing in‚ make their production decisions based on where: marginal revenue equals marginal costs. 2. According to the table below‚ when profits are maximized‚ profits are equal to: $2. 3. Many economists believe that the market for wheat in the United States is an almost perfectly competitive market. If one firm discovers a technology that makes their wheat taste better and have fewer calories than all other wheat
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Tutorial Questions Topic 1 1.1 Mary and Margaret have the same preferences and incomes. Just as Mary arrived at the cinema to watch a 3D movie‚ she discovered that she had lost the $100 ticket she had purchased earlier. Margaret also just arrived at the cinema planning to buy a ticket to watch the same movie when she discovered that she had lost a $100 note from her wallet. If both Mary and Margaret are rational (who make decisions to maximize economic surplus) and both still have enough money to
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organization. In today’s struggling and uncertain economy organizations can market their products through marketing such as advertising‚ Internet‚ word of mouth‚ newspapers‚ radio‚ and television Finally‚ attached chart represents variable cost‚ marginal cost‚ profit‚ price and other activities within organization of Thomas Money Service. Revenue‚ Cost Concepts‚ and Market Structure Proposal 3 Recommendations for Thomas Money Service Increasing Revenue Established in 1940 Thomas Money Service
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margin was .4%. They are continuing to improve as a company‚ and it is believed that they will continue to grow at a good pace. They have the strongest Balance Sheet within the airline industry ("Southwest corporate fact‚" 2013). Lower Prices & Marginal Costs One of the most important ways for Southwest Airlines‚ or really any airlines‚ to keep their prices down is to keep fuel prices down. Recently there has been an increase in the price of oil; therefore‚ Southwest has to slightly raise the
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production‚ price‚ and total profit per week? Ans1. Level of optimal production is obtained by setting Marginal Revenue equal to Marginal Cost. If Demand function is Linear then‚ P=a-bq Revenue is R (Q)=P(Q)Q and Marginal Revenue (MR)=a-2bq Here‚ a=120 and b=0.02 Therefore‚ MR=120 – 2(0.02) Q =120-.04Q Total Cost C =60q+25000 so Marginal Cost (MC)=60 Setting MR = MC 120-.04Q =60 Q= 60/.04 =1500units Level of Production= 1500units Substituting
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3. Difference between Unethical and Unlawful Behaviour in the Business Context By definition‚ ethics refers to “a set of principles of right conduct.” It is also defined as “the rules or standards governing the conduct of a person or the members of a profession‚” (www.thefreedictionary.com) and in business may be considered the standards governing the conduct of people in the business environment. Business ethics is the behavior that a business adheres to in its daily dealings with the world.
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This paper investigates the two extremes of market structures. A monopoly firm‚ and a firm which operates in a perfectly competitive market. We will compare features‚ similarities‚ differences‚ advantages and disadvantages. The monopoly firm I have chosen is Thames Water. This company is an accurate example‚ as it’s the sole supplier of the industry. The firm‚ is the industry. Thames Water supply water through peoples taps in and around London. Fyffe is my chosen firm in a perfectly competitive market
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