In the three articles I researched, each author looks at the following use of marginal cost & marginal revenue in decision-making with a strategic point of view. I looked at Covering Entrepreneurship and small business: Basic economic principles: Part II & I the articles written by Karen Hallows. I also looked at What Are the Benefits of Marginal Costs Equal to Marginal Revenue by Thomas Metcalf.
The conclusion in my first article is she looks at the basic principles of economics. Risk and return marginal benefits, marginal costs, and opportunity costs and sunk cost. She looks at a few examples. One was the food on the airlines. She goes on to state the food is bad. However, explaining that risk and return on the food is not the airlines priority it is to have a full plane of passengers. Next, she looks at opportunity cost regarding college educations and states it is lower for young adult’s age group of 18-21 verses older age groups 48-51. She also shows a few great examples of sunk cost. Best example was the all you can eat pizza buffet for $5.00. She shows an e...
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- Total revenue, which is the total amount of income received from the sales of a certain quantity of goods or services. Total revenue can be calculated by multiplying the price of a product times the quantity sold. For instance, if 160 baseball caps are sold and each baseball cap was priced at $5 each, the total revenue would be (160*5) $180. Total cost is all of the expenses incurred in the production of a product, to include fixed and variable costs. Fixed costs, are expenses that are constant and do not change from month to month regardless of the amount of products sold.... [tags: Costs, Economics of production, Marginal cost]
1057 words (3 pages)
- Study Guide #4 Module 11. PRODUCTION & COST CONCEPTS 1. What is the relationship between a firm’s total revenue, profit, and total cost. The total profit of a firm is equal to total revenue minus total cost. In other words, total profit equal total revenue (the amount of a firm receive for the sale of its output) minus total cost( the market value of input a firm uses in production). 2. Give an example of an opportunity cost that an accountant might not count as a cost. Why would the accountant ignore this cost.... [tags: Economics, Costs, Marginal cost]
1799 words (5.1 pages)
- In this essay, I will be explaining the concept of supply & demand and the factors that will show the relationship between costs and revenues in International business and I will also show how a manager might use these factors in order to maximize profit and use examples and diagrams to explain. In this paragraph, I will be explaining the Supply and demand concept by using examples and diagrams when explaining and I will be explaining the relationship between cost and revenue and supply and demand.... [tags: Supply and demand, Economics, Microeconomics]
1001 words (2.9 pages)
- In carrying on with the previous example of my present employer, the Australian Football League, I see some real benefits that could improve the organisations performance outcomes – specifically I’d like to consider the concepts of; supply & demand, cost analysis and capital budgeting. The AFL and the concept of supply & demand In describing the concept of supply and demand, supply can be referred to as the amount of specific goods and services that is available to consumers. Supply can relate to the quantity available at a specific price or the amount available at a range of prices.... [tags: Costs, Economics, Marginal cost, Microeconomics]
730 words (2.1 pages)
- Operations In the business world, there are challenging obstacles that may arise throughout a business, but it is the will power and the mind of determination to be successful. Operating a business might seem small to some or big to others; however, keeping the focus and satisfying the customers will aid in your operational decision-making process. Operation choices include decisions that are strategic in nature, meaning that they have long-term consequences and often involve a great deal of expense and resource commitments (Boundless.com, 2016).... [tags: Marginal cost, Economics, Costs]
1247 words (3.6 pages)
- Regulation Agencies The main carbonated beverage regulation agency that comes to mind is the FDA. The FDA is known as the Food and Drug Administration, the “FDA is responsible for protecting the public health by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation.” The FDA is the front line for exposing the unhealthy ingredients that go into making a soda, thus the soda companies are at constant odds with the FDA.... [tags: Economics, Monopoly, Marginal cost]
815 words (2.3 pages)
- Written Assignment – Unit 5 In economics, when we are trying to fully understand the cost of our decisions, we don’t only analyze the monetary costs but also what we have to give up in order to make our selection. Monetary costs are referred to, in the economics world, as explicit costs, and are typically easy to analyze (OpenStax, 2014). It’s the items or even time that we must give up, that are a bit more difficult to quantify. These costs are referred to as implicit costs (OpenStax, 2014). In the business setting, these could be the use of company owned resources or even the business owners time.... [tags: Economics, Cost, Profit, Costs]
819 words (2.3 pages)
- The business I choose to start is a piggy bank designing company. My company makes over 100 different styles and textures of piggy banks. To produce our most popular, style the matte black stainless steel piggy bank, it cost $5 to acquire all the material it will take to make it. The market value set for a single piggy bank is set at $11. My total fixed cost including rent and utilities for my business is $4,000 per month. My cost function is C(x)= 4,000+11x. In order to get the linear cost function, I take the equation C =mx+b.... [tags: Marginal cost, Costs, Variable cost, Economics]
717 words (2 pages)
- 1. An explicit cost is a direct payment throughout the duration of running a business e.g. a wage, materials cost and rent. An implicit cost is where there is no actual payment as it more refers to the opportunity cost of what a firm has to give up in order to use another factor. Examples include depreciation of assets, loss of interest income on business funds, or the foregoing of a salary to add revenue to the business early on. 2. In economics, the short run is where at least one input in the production process is fixed and the rest are variables within a certain period of time.... [tags: Costs, Average cost, Economics of production]
782 words (2.2 pages)
- Introduction The purpose of this academic essay is to establish the differences between demand analysis and demand estimation while describing the importance of each to firms with regard to managerial economics. This document will also explore price elasticity and its relation to marginal revenue and profit maximization. The significance of this essay for the student body audience is to provide a canopy for integrated learning economical concepts and their application to real world scenarios in business related occupational fields.... [tags: price elasticity, marginal revenue, profit maximiz]
527 words (1.5 pages)