COST ANALYSIS OBJECTIVES INTRODUCTION MEANING DEFINITIONS TYPES OF COSTS MONETARY COSTS REAL COSTS OPPORTUNITY COSTS ECONOMIC COSTS ACCOUNTING COSTS INCREMENTAL COSTS SUNK COSTS FUTURE COSTS PRIVATE‚ EXTERNAL AND SOCIAL COSTS FIXED / SUPPLEMENTARY / OVERHEAD COSTS VARIABLE / PRIME COSTS REPLACEMENT COSTS PRODUCTION COSTS SELLING COSTS CONTROLLABLE COSTS DIRECT COSTS INDIRECT COSTS SHORT RUN COSTS CURVES LONG RUN COSTS CURVES OBJECTIVES To understand the meaning of cost. To discuss different types
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table: Tiles produced 1000 2000 3000 4000 5000 6000 7000 8000 Workers required 10 19 27 34 41 48 58 70 a. Calculate the average and marginal product of labor for each increment of 1000 units of production and present your results in table. In a sentence or two describe the results. b. If Art-tile receives $9 per tile‚ calculate the marginal revenue product for each level of production. c. If Art pays his workers $800 per week‚ how many should he hire? (Assume that labor is his only
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monopolistic competition where a company sells widgets. As more widget are sold the company must offer discounts on the product in order to sell more units. The table below includes the Total Revenue and Total Cost information needed to perform marginal revenue and marginal cost calculations that will be explained below. Quantity0123456789101112131415Quantity0123456789101112131415 TR$0.00$150.00$290.00$420.00$540.00$650.00$750.00$840.00$920.00$990.00$1‚050.00$1‚100.00$1‚140.00$1‚170.00$1‚190.00$1‚200.00TR$0
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CHAPTER 10: PURE MONOPOLY Pure monopoly – single firm is the sole producer of a product for which there are no close substitutes; characteristics: * Single seller – sole producer or sole supplier; firm and industry are synonymous * No close substitutes – consumer who chooses not to buy the monopolized product must live without it * Price maker – pure monopolist controls the total quantity supplied‚ so has considerable control over the price; changes product price by changing quantity
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MT445- 02: Managerial Economics Unit 7 Project Professor Hernan Verlarde Chapter 15 2. (Government Regulation) What three types of government policies are used to alter or control firm behavior? Determine which type of regulation is used for each of the following: a. Preventing a merger that the government believes would lessen competition b. The activities of the Food and Drug Administration c. Regulation of fares charged by a municipal bus company d. Occupational safety
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improving his current product. Economic analysis of the new product will further define what would be necessary for the product to enter the market and be successful. The subjects to be outlined are as follows: profit-maximizing‚ increasing revenue‚ marginal
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organization may be classified in a number of different ways for a number of different purposes. I will also be looking to find companies that use a variety of different costing techniques and methods. I will also be discussing the comparisons between marginal and absorption costing and how the concept of activity based costing can also be compared with these. To complete the assignment I will be using a combination of lectures notes‚ text books and the internet to research the various ways of cost classification
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achieved is at the production of 8 units. 2. The second method is the marginal revenue to marginal cost approach. MR=MC This method uses the point at which both marginal revenue and marginal cost are equal to each other to determine at what point the quantity produced maximizes total economic profit. In exhibit 1‚ the point at which marginal revenue and marginal cost are equal is at the production of 8 units B. Marginal revenue (MR) is the additional revenue received by producing and selling
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period of time. The total revenue is calculated by taking the price of the widget and multiplying it by the quantity produced. For Example‚ the marginal value would be greater if the company made one more widget and the total revenue increased. There would be no changes in revenue if the company decided to sell another widget and the marginal revenue was zero. When calculating profit maximization using the total revenue/total cost approach‚ you must consider the importance that profit
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for $2 per unit and luxuries sell for $5 per unit. a) Draw the budget constraint of the consumer and explain your diagram. b) Knowing that the marginal utilities of F and L are MUF = L and MUL = F‚ respectively‚ compute the amount of each good in the consumer’s optimal basket. 2. Let income be I = 80‚ Px = 4‚ Py = 1‚ and utility U = xy (with marginal utility MUx = y and MUy = x). a) Compute the optimal consumption bundle for the consumer. b) Now‚ let the price of x fall to 1 and the income
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