Marginal revenue Essays

application of each of the following. Define the terms in your own words and use examples that clearly demonstrate your understanding of each concept. a. The Law of Diminishing Marginal Returns (____/5) - The Law of Diminishing Marginal Returns describes how as the number of input variables increases, eventually the marginal per unit begins to decrease. An example of this law is in a candy bar production line, if there are three workers, then they all have their specific jobs that they can get done

company. Determining the marginal cost and marginal revenue will help guide me to the correct decision on hiring each additional sales worker. How would you estimate the additional dollar cost of each additional salesperson? The size of the direct sales force needs to be expanded from 60 national sales workers to an additional 5 to 10 workers. In order to calculate the additional dollar cost of each additional worker, the marginal cost needs to be calculated. Marginal cost is determined as an

Critical Thinking Questions 26. How does fixed cost affect marginal cost? Why is this relationship important? A fixed cost is the overhead charge that does not change with the volume of business. (Fixed cost, n.d.). The marginal cost refers to the additional cost that is charged in the production of one more unit of good. (Greenlaw & Taylor, 2017). Fixed cost is constant and does not affect marginal cost in a negative light. If there were no variable cost and it would have only been fixed cost in

In relation to short term run, the price is greater than marginal cost, thus it may not generate profit in the short run. In relation to long run analysis, marginal revenue always equals to marginal cost. In order to become profitable, the price needs to be greater than the average total price cost (Mankiw, 2011). For the company’s price, in the short run, must meet average variable

Each SRAC curve represents the firm's short-run cost of production when different amounts of capital are used. The shape of the LRAC curve is similar to the SRAC curve while the U-shape of the LRAC is not due to increasing and later diminishing marginal. The -ve slope of the LRAC curve signifies economies of scale and increasing returns to scale. On the contrary, the +ve slope of the LRAC curve represents diseconomies of scale. I completely agree with the recent development in cost theory that

appears and it is clearly shown in the diagram 1. While the socially optimal point would be at Q and P, the actual level of consumption and price is higher (Qe,Pe). The reason many consumers do not care about the MSB is that MSC ( marginal social cost) is equal to the MPC ( marginal private cost).  In order internalize the externality, which means making consumers pay for the negative effect, the government imposes am indirect tax on the good that produces the negative externality. In theory, it will

Introduction: This study investigates empirically the relationship between the uses of profit sharing schemes to increase company performance. It uses the control factors that affects company performance to do the analysis. The study analyses by using the dependent variables; profit margin against the dependent variables, Firm size, ownership concentration, age of the firm, the growth of sales, and the scheme. The study establishes that there is a little effect of the size of the firm to the performance

the groundwater system and provide an adequate supply of fresh water because of carbonate substrata underneath the ground. Only 10 percent of the water penetrates. The reality is that the Everglades and other areas in Florida are very close to a marginal water

In this section, I’ll be explaining the difference between implicit and explicit costs. I will also provide two examples when they differ. An explicit cost is the amount of expenses a business incurs when conducting an activity. This type of cost includes but not limited to salaries, materials, rent and utilities. (Explicit Cost, n.d.). An implicit cost is considered the opportunity cost of an activity. This is when the firm use its own resources to cover the expense of an activity. If the firm

which are major electronic retailers. The companies have been competing for many years to become the top electronic retailer. Conn’s is a smaller company than Best Buy but some of Conn’s ratios seem to be better than Best Buy. Best Buy have more marginal debt and also has a lower profit margin, but there are some advantages. For example, Best Buy has a lower average collection period and has a higher return on total assets. Best Buy was established in 1966 by Richard Schulze and Gary Smoliak, originally

As noted, Dewhurst Plc has a ROCE of 22.01% in 2016. In other words, every dollar invested in employed capital, the company earns 22.01%. Dewhurst Plc.’s Return on Capital Employed (ROCE) of 22.01% in 2016 was lower than in 2015 23.32% ROCE. This means that the company’s ROCE in 2016 as against 2015 was not doing a better job of deploying its capital. The results have been adversely affected as a result of 4.67% decrease in operating profit. But when the company’s Return on Capital Employed (ROCE)

airline industry, a low current ratio may not necessarily mean that a company is in peril. Reason being is that a large portion of the high current liabilities may relate to the pre-purchased tickets, which the airline can honour for a relatively low marginal cost. b) Profitability Profitability ratios are used in an effort to evaluate management’s ability to monitor and control expenses, and to earn a profit on resources committed to the business. These particular ratios assess a company’s strengths

When the average cost of production decreases as the volume of its output increases, the process of economies of scale is said to be achieved. For instance, it may cost $3,000 to produce 100 copies of a magazine yet only $4,000 for 1,000 copies. The average cost dropped from $30 to $4 per magazine because the main elements of cost in producing the copies (editing, designing etc.) are distinct from the number of magazines produced. Adam Smith recognized the division of labor and specialization as

MANAGERIAL ECONIMICS ASSIGNMENT SUBMITTED TO PROFESSOR AMIT SHARMA Answer 1 (a) Accounting costs are the actual outflows or expenses incurred by a firm which are recorded in its accounting statements. So in this case the accounting costs will be $200000. (b) Opportunity cost is the cost associated with choosing one alternative in place of the other we can also say that opportunity cost is the cost of making a decision. So in this case the opportunity cost is $35000 (c) In order

economic profit. Give two examples of when they differ. The concept of accounting profit is cash related, in other words, the amount of money made minus the amount of money spent. It is calculated by subtracting explicit costs from the firm’s total revenue, additionally, tax is calculated based on accounting profit

accounting, then discuss the advantages as well as drawbacks of both methods and give the conclusion which type of accounting is suitable to record. Accrual accounting is an accounting that revenues are recognized when sales have been made and expenses are recorded when they are incurred, even the cash receipt from the revenue or the cash payment related to

Federal Express and Consumers has provided a new vision to the flower industry which benefits everyone and have made Calyx & Corolla one of the most competitive players in the industry. Even after being one of the fastest growing industry with a revenue yielding of more than $10 million in a span of just two years surpassing all the expectations, the concern that surrounded the firm was how to expand their growth, in which

Commercial and Commercial-Type Products According to the Federal Acquisition Regulations (FAR) “Commercial item” means any item, other than real property, customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and has been sold, leased, or licensed to the general public, or has been offered for sale, lease, or license to the general public. A “commercially available off-the-shelf” (COTS) item is any item or supply (including construction

Based on our calculations in Appendix 1. at the first stage support costs were allocated to two existing departments, i.e. Machining and Assembly, based on direct labor hours. Therefore total amount of costs assigned to Machining department is $472.000,00 and to Assembly department is $248.000,00. At the second stage total costs from both departments were distributed to products (Regular and Deluxe). Referring to our calculations in Appendix 1. you may find that total amount of costs assigned to

TIVA may be favoured as the anesthetic technique of choice for the following reasons ADVANTAGES OF TIVA: 1. Rapid smooth induction and maintenance of anesthesia Induction of anesthesia with propofol is smooth and associated with a low incidence of excitatory side effects. Doses of 1 to 2.5 mg/kg (depending on patient age, physical status, and use of premedicant drugs) induce anesthesia in approximately 30 seconds. The speed of onset and the dose of propofol needed for induction are dependent on the