Nobody downloaded yet

Work on Economics - Essay Example

Comments (0) Cite this document
Summary
The elasticity of the demand is calculated based on the changes in price while all other factors are held constant (Gans & Mankiw, 2011). It therefore, gives a measure of responsiveness of quantity demanded depending on the changes of prices of the Justcookbooks.com while the other factors are held constant. …
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.9% of users find it useful
Work on Economics
Read TextPreview

Extract of sample "Work on Economics"

Download file to see previous pages It therefore, gives a measure of responsiveness of quantity demanded depending on the changes of prices of the Justcookbooks.com while the other factors are held constant. Price elasticity of the demand = Proportionate change in quantity demanded Proportionate change in price Price elasticity of the demand = Q1 – Q2 (Q1 + Q2)/ 2 P1 – P2 (P1 +P2)/ 2 Price elasticity of the demand = -305,000 +215,000 (-305,000 + 215,000)/ 2 Price elasticity of the demand = 35– 25 (35 – 25)/ 2 Price elasticity of the demand = 2/2 = 1 Since, the price elasticity of the demand is equal to one, the demand for the online Justcookbooks.com have a unitary elasticity. This is because small changes in price undertaken do not affect the total revenue generated from the books demanded. As a result, an increase in the price further than the price of $ 35 will not affect the demand for the books. With a unitary elasticity, it is not business worth to undertake the business from its current state as the price increases will not affect the revenues generated (Mankiw, 2012). ...
+ 16,000 = $456,000 Marginal Cost More than often, the marginal cost is calculated, as the additional cost incurred when an extra one more unit of the Justcookbooks.com is produced (Mankiw, 2012). With the equation total cost = 20 Q + 16000, the total cost goes up by $20 each and every time an additional good is sold. Therefore, we take the coefficient of Q which indicates the quantity demanded that gives a constant marginal cost is $20 per unit sold. Implications of Long Run and Short Run Period In most cases, companies face a lot of challenges while carrying out its operations in both the long run and short run period. This is because in the short run, one factor of production remains constant as it is always assumed to be in fixed supply. Therefore, the essential capital inputs for example, the cost of equipment remains fixed while the other costs incurred remain varied over time (Mankiw, 2012). More than often, the law of diminishing returns applies in the short run period, as more units of a variable input is added to the fixed amounts of equipment, which brings about the change in total output that rises at first and thereafter falls with time. Nonetheless, in the long run, all factors of production are considered to vary with the quantity of goods sold over time. In the long run, the output of the business will respond to changes in factors of production inputs that are usually referred to as returns to scale. This ranges from increasing, constant and diminishing returns to scale. Diminishing Marginal Returns and Economies of Scale Both the diminishing marginal returns and economies of scale are phases under which a product in the market has to undergo over time. Under the law of diminishing returns, an addition of one type of production input while the other ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Work on Economics Essay Example | Topics and Well Written Essays - 3000 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1445844-econ
(Work on Economics Essay Example | Topics and Well Written Essays - 3000 Words)
https://studentshare.org/macro-microeconomics/1445844-econ.
“Work on Economics Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/macro-microeconomics/1445844-econ.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Work on Economics

Economics and care work

...?Economics and care work The dynamics of care work have changed from the care work practices provided in the Victorian period. Economic conditions during the Victorian era were quite harsh. Middle-class men worked like machine to earn livelihood and their desire to return home after hard labor was fructified by the comforting home environment provided with the home care efforts and artful handling of the home sphere by the ladies working whole day providing needed care to all members of the family. Relationship between the middle class spouses was based on mutual trust of exchanging and sharing gifts unlike the “crass”...
11 Pages(2750 words)Essay

Managerial Economics Week 6 Individual Work 1

...luggage fees as one of the best alternative to solve the problem of increased costs of oil and operational costs for the air travel. Airlines are companies meaning they need to make decisions that boost their revenues. Increases in revenues enable airlines to remain competitive in the industry. The increase in oil prices is an evident phenomenon all over the world. The world economy is also unstable. Volatility in oil prices and world economic downturn are some of the biggest challenges the airline industry has to face today. Increased oil prices and security costs are major reasons explaining operational losses for many passenger airline companies. It is because of such costs that airline companies such as US airway...
3 Pages(750 words)Assignment

Managerial Economics Week 6 Individual Work 2

...MANAGERIAL ECONOMICS WEEK 6 Insert Insert Q 2 The relationship that exists between enrolment and operating expenditures per follows a non-linear form. From the relationship, it is evident that an increase in enrolment gives uncertain results regarding the behavior of the operating expenditures per student. Several steps are being involved whereby in the first stage, there is a decrease in the operating expenditure per student and a decrease in enrolment. In the second part, there is evidence of increasing enrollment and at the same time an increase in operating expenditure per student. Q3 Cost-output relationship suggested by the statistical results As the cost output relationship forms a wiggle, it then indicates a cubic function... ...
3 Pages(750 words)Assignment

Managerial Economics Week 7 Individual Work

...MANAGERIAL ECONOMICS WEEK 7 Insert Insert Q7 a) Impact of a cut price on total revenue TR=P.Q 5% reduction on price($10) P=$9.5 TR=9.5*20000 =19000 The initial total revenue is : 10*20000=200000 200000-190000=10000 With a 5% decrease in price, the total revenue will reduce by $10000 TC=FC+VC=60000+120000=180000 TC=$180000 A reduction in prices will not affect the total costs in this case. Total profits after the reduction become: 190000-180000= 10000 ∏=$10000 Initial total revenue is $200000, after the reduction the total revenue is $190000. A 5% reduction in prices reduces the profits by $ 10000. b) Average variable costs after a 10% increase in output AVC=TVC/Q=120000/20000=6 AVC=6 A 10% increase in output from 20000...
3 Pages(750 words)Assignment

Managerial Economics Week 8 Individual Work

...MANAGERIAL ECONOMICS WEEK 8 Insert Insert Motorola Iridium was among the first devices to offer satellite phone services. When Iridium was developing there was space for room for product development since there were minimal developments in the phone industry. In the early and mid-1990s, cell phone companies lacked the required infrastructure to offer products for their customers. Due to rapid expansion of the industry at the time many companies lacked the capacity to offer services to customers. Users were unable to make calls comfortably. There were many difficulties facing the cell phone industry at the time. Due to such limitations in cell phone technologies, the satellite phone was the best alternative to a wireless...
3 Pages(750 words)Assignment

Managerial Economics Week 10 Individual Work

...Managerial Economics Week 10 Individual Work Insert Insert Price elasti of demand in the U.S. = -2.0 Price elasti of demand overseas = -3.0 U.S. marginal cost = $40 Overseas marginal cost = $ 15 Profit maximization price (P) for the U.S. market = [40 x (-2/-2+1)] = 80 Profit maximization price (P) for the overseas market = [15 x (-3/-3+1)] = 22.5 4 Many firms and companies use two-part pricing strategy to gain market power and increase their market share. In this type of pricing firms charge a fixed feed for the right to use their goods and an extra charge for each unit an individual purchases. Examples include country club membership. Lump sum fees are charges that an individual pays for...
3 Pages(750 words)Assignment

Managerial Economics Week 12 Individual Work

...MANAGERIAL ECONOMICS WEEK 12 Insert Insert Total costs = $20, Total benefits = 13.12 Discount = 10% of $13.12 312 Discount = 10% of $20 = 2 Discounted incremental costs = $18 Discounted incremental benefits = $11.808 BCR = Discounted value of incremental benefits ÷ Discounted value of incremental costs = 11.808÷ 18 = 0.656 2 After discounting the costs against benefits, the BCR value is less than 1. This means the project should be rejected. 3 Intangible benefits and costs include important aspects of the project whereby it is very difficult to attach a monetary value. Intangible benefits of the fairground redevelopment project include increased employment opportunities for people. Despite the fact that it is difficult to place... of the...
3 Pages(750 words)Assignment

Managerial Economics Week 2 Individual Work

...in income will lead to an increase in demand while a decrease in income will cause the demands to fall. It would be logical to develop an implementation plan that relocates canning machines in low income regions since the demand for soft drinks may be dependent on income. This is evident from regression equation whereby there is a relationship between income and demand for a common good. References Flores, N., & Carson, R. (1997). The Relationship between the Income Elasticities of Demand and Willingness to Pay. Journal of Environmental Economics and Management, 33 , 287-295. Mhrch, C., Eyles, H., Schilling, C., Kaye-blake, W., & Blakely, T. (2013). Food Prices and Consmer Demand: Differences across Income levels and...
3 Pages(750 words)Assignment

Managerial Economics Individual Work wk1

...Economics School In economics we study the manner in which goods are produced and consumed. The definition of economics also covers the transfer of wealth for the production or acquiring of goods. It explains how different classes of people interact in different markets to fulfill their desires. In our document, we shall discuss some concepts fundamental to economics including market efficiency. Keywords: economics, concepts Fundamental concepts of economics There are many concepts we can rank as fundamental for the understanding of economics. These are: scarcity of resources, factors of production, utility, marginalism and sunk cost, opportunity cost, needs and wants, producer and consumer, market efficiency etc. Some... of that...
3 Pages(750 words)Essay

Managerial economics individual work week 12

...relationship, they may take the business casually. That may be a cause for conflict which may lead to the severance of the relationship. However, even with those challenges, forming a partnership with close friends may also have its benefits. First, a friend would be someone you know well hence you have an idea of their capabilities, level of commitment, work ethic and even their skills. It is easy to find out if the friend compliments you in all aspects. The knowledge of how a friend manages resources especially money and time would be a significant advantage to the partnership. That may not be possible for someone you barely know. That supports the possibility of forming a partnership with close...
3 Pages(750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Work on Economics for FREE!

Contact Us