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.
Nobody downloaded yet

Production, Costs and Profits - Essay Example

Comments (0)
Summary
Production, Costs And Profits [University] [Instructor Name] Q:1 The manager of the restaurant needs to consider several factors before deciding whether to purchase a new grill and French fry machine or to employ additional workers as suggested by its supervisor…
Download full paper
GRAB THE BEST PAPER
Production, Costs and Profits
Read TextPreview

Extract of sample
Production, Costs and Profits

Download file to see previous pages... However, after a certain level of output the marginal revenue product of labor starts diminishing with each additional unit of labor/worker. This means with each additional worker, although the output is increasing, but at a decreasing rate, i.e., negative marginal returns. If this continues, there might come a point at which output actually starts falling with addition of variable factor labor. Under such, if the capital has reached its limit/full capacity, the manager of the restaurant should consider adding a new grill and French fry machine as adding workers will only add to the costs and will not solve the problem (Rittenberg & Tregarthen, 2009, Chapter 8). Q: 2: Marginal Decision Rule: The marginal decision rule says that the optimal point is the one in which the marginal utility of the next unit is equal to its marginal cost. This rule was applied in this case when deciding how much labor and capital to use. Initially, the industries operating in the maquiladoras were very labor incentive and only about 9% skilled labor was required to operate the existing setup. But then as the industry became more capital intensive, then more skilled labor were required and the percentage increased to 12% (Lucinda, 2001). Benefits: Although the capital and skilled labor were increasing in the Maquiladoras, but proper training was being given to them so that they can do the work properly and the marginal product rises instead of declining. Maquiladoras have benefitted US a lot. It has increased the business in the border areas. Moreover, it has created jobs for the people. Many manufacturers have also relocated in these areas. Due to this, the areas which were facing double digit unemployment have now generated enough jobs to reduce this unemployment. Moreover, the infrastructure has also developed in the areas where Maquiladoras are located in the US (Lucinda, 2001). Q.3 A generic drug company is one that produces drugs that are identical in essence (not literally) to branded drugs in dosage, strength, quality, intended use and performance characteristics. The chemical formulation is also similar and the name is often kept after the chemical name for marketing without much advertising. The generic drug industry, though still highly regulated, was given some relaxations under the Drug Competition and Patent Term Restoration Act of 1984 after which the industry boomed. The fact that the generic drug companies do not have to invest much on the research and development as compared to branded drug companies is the single most important factor for the success of these companies. For any drug company, R & D is a huge investment that it makes in order to keep coming up with new and better drugs for the healthcare industry and forms a significant part of the overall manufacturing and marketing of a particular drug. Thus, the companies that simply take the chemical formula of branded drugs without investing on R & D themselves save on their costs and are able to sell the drug at a significant discount from the price of an identical branded drug. Thus, a cheaper drug with similar properties will obviously sell more. Secondly, with generic drug companies allowed to make identical drugs, the patents are unable to protect branded drug comp ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Production, Costs, and Profits
Economists usually consider the implicit costs and explicit costs of operating, often called as opportunity cost, while accounting cost do not count the explicit costs of the owner. Ralph Bryns, 2011 argues that a business becomes profitable in the overall perspective when a firm’s revenue exceeds the explicit and implicit costs.
4 Pages(1000 words)Admission/Application Essay
Costs, Revenues and Production Decisions
The profits of a firm in essence are the total revenue net of total costs. Both these variables, total revenues and total costs depend upon the level of output produced. Additionally, the price charged per unit of the product influences the total revenue.
3 Pages(750 words)Essay
Supply: Production, Costs, and Profits
The magnitude of economic cost is dependent on the value of the foregone benefits of the best alternative and the cost of the alternative selected. The main difference between accounting cost and economic cost is that the later factors in the concept of opportunity cost (Boyes & Melvin, 2011).
4 Pages(1000 words)Essay
On Maximising Profits
There are, however, many other potential financial objectives that a business can assume (Objectives to Business - Alternatives to Profit Maximisation 2005). According to Enke (1965, p.53), it is quite unreasonable to suppose that each firm acts to maximise profits on grounds that in face of uncertainty, the profit maximising motive does not provide the entrepreneur with a single and clear criterion for selecting one policy from among the set of alternatives open to him.
6 Pages(1500 words)Essay
ECO201: Microeconomics-Mod 4 CBT
Basically, failure of a company to satisfy the market demand as scheduled means that the company will lose a lot of business opportunity caused by production inefficiency or internal miscommunication. For this study, the student will
2 Pages(500 words)Essay
Variable and Fixed Costs
On the other hand, variable income statement organizes costs incurred by business by their behavior. Additionally, it indicates the
2 Pages(500 words)Essay
Supply: Production, Costs, and Profits
Basically, a company can realize two types of economies of scale according to Alfred Marshall namely internal and external economies of scale. Internal economies of the scale are realized when a firm increases its production and reduces its cost. External economies of
2 Pages(500 words)Essay
Supply: Production, Costs, and Profits
Variable cost: These costs are comprised of all the cost which a business firm can change deliberately. They involve all the inputs or
4 Pages(1000 words)Essay
COSTS OF PRODUCTION
It is imperative to identify that there are some inputs that are not divisible. Essentially, these are inputs that cannot be splinted into smaller units. Apparently,
3 Pages(750 words)Essay
The Economics of the Just Price
Unfair pricing practices are common in economic systems since mediaeval times and have necessitated adoption of fair pricing concept (Shirvani, 2014).
1 Pages(250 words)Essay
Let us find you another Essay on topic Production, Costs and Profits for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us