Marginal revenue is the revenue that is added by one extra unit of output (Schenk, 2011). If this concept was to be expressed in terms of a formula, we could say that the change in total revenue is divided by the change in sales.
1. In order to determine the total revenue…
Download full paperFile format: .doc, available for editing
Download file to see previous pages
If the marginal revenue is known, then the total revenue can be worked out for a specific change in sales.
B. Marginal cost is the change in total cost that comes from producing one more item (“Investopedia,” 2011). The reason why organizations need to find marginal cost is to determine when economies of scale can be achieved.
1. Total cost is the cost of producing all the units of production. It is important to know and understand the total cost because it will determine whether or not it is worth it to produce one more unit. The key is to find the optimal point and then do not produce more than the marginal cost allows.
C. Profit it the total revenue made in a certain period of time divided by the total expenses or costs or that same time period. It is important to have as much profit as possible because it determines the financial health of a business.
1. Profit maximization is achieved at the point where marginal revenue equals marginal cost. This is the optimal point of production because any change, whether an increase or decrease, would result in less profit for a firm, and thus not achieving profit maximization.
D. Profit maximization is the output and price of a certain product that achieves the greatest amount of profit for a firm. The can be found be determining looking at a graph that contains marginal revenue and marginal cost as its axes. The point where these two lines intersect is where profit maximization can be attained.
E. If marginal revenue happens to be greater than marginal cost, then a profit maximising firm must increase production until the marginal cost and marginal revenue is the same. This is because if more products are produced, then less marginal revenue can be gained, thus decreasing marginal revenue to a point where it is equal with marginal cost.
F. On the other hand, if marginal revenue happens to be less than marginal cost, then a firm must decrease production until marginal revenue and marginal cost
...Download file to see next pagesRead More
Cite this document
(“Marginal analysis Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Marginal analysis Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/macro-microeconomics/1578105-marginal-analysis
(Marginal Analysis Essay Example | Topics and Well Written Essays - 500 Words)
Marginal Analysis Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/macro-microeconomics/1578105-marginal-analysis.
“Marginal Analysis Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/macro-microeconomics/1578105-marginal-analysis.
This paper aims to: explain what action a profit-maximizing firm takes if marginal revenue is less than marginal cost; define the following three terms
(elasticity of Demand; cross-Price Elasticity; income Elasticity) explains the elasticity coefficient for each of three terms.
According to the study conducted all the students attending college do not have to earn for their expenses. Sometimes students are dependent on their parents who take the responsibility of paying for all of their son’s or daughter’s expenses. Attending college and pursuing a degree course also requires a student to study harder and appear for examinations.
The output can also be a service rather than a good. To be noted is that " production " refers to all of the activities involve in the production of goods and services, from borrowing to set up or expand production facilities, to hiring workers, purchasing raw materials, running quality control, cost accounting and so on, rather than referring merely to the physical transformation of inputs into outputs of goods and services.
For resolving this parking issue, City Council provided a lot of advice the implementation of which will take a long period of time.
In order to solve the parking issue, one of the banks in the area recommended a solution. For car parking, the bank proposed to charge
The theory of economics helps us to make optimum decision. In this context, the marginal analysis is very important—it is used to help people optimally allocate their scarce and valuable resources in order to maximize the
This paper will discuss two peer reviewed journal articles on marginal analysis.
In this article, Donald Rudow uses marginal analysis to evaluate Gushan Environmental Energy Ltd’s (GU) diversification into recycled copper business, away from biodiesel fuel segment which
2. In terms of marginal revenue and marginal cost, the profit maximizing quantity is the one where the marginal revenue equals the marginal cost. When the company goes on increasing the quantity, the marginal revenue keeps on increasing as
1 Pages(250 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Save Your Time for More Important Things
Let us write or edit the essay on your topic
with a personal 20% discount.