Marginal cost

used) to presenting(present) the income statement which is(are) the marginal costing and the absorption costing, the net profit difference will be reconciled between these two methods after the income statement is complete. Marginal and absorption costing are two different approaches to dealing with fixed manufacturing overheads and whether or not they are included in valuing inventory. The marginal cost is the total variable cost of the product, it consists of direct labour hours, direct materials and direct expenses, therefore when the production units increase, the total variable cost will increase proportionately. In other word, the marginal cost can be avoid if there are no any unit to be produced and will…

The curve slopes down to reflect that the cost of ordinary goods is inversely related to the demand function. Simply, the price of a good or service reflects the demand in the market as the price of the good increases or decreases. The overall price of the good in the market is seen as a function of the market demand and the market supply. Once the price of the good has been set the individual firms are forced to price their goods relative to the overall market price. Lack of power to set prices…

baseball field is: Question 3 A means of creating a price-excludable public good is: Question 4 An example of an undesirable public good (or public “bad”) is: Question 6 The marginal cost of making a given quantity of a congestible public good available to more con­sumers is: Question 7 Public transportation is: Question 8 The efficient output of a pure public good is achieved at the point at which: Question 9 The demand curve for a pure public good is:…

Meaning the amount of money it costs to create a product equals how much is being profited from a product. This is the general rule for hiring, because this is when the firm is not losing money, so by hiring it will not cause the firm to lose money. There are four determinants of elasticity for MRP, number one: the greater the elasticity of demand for the final product, the greater the demand for labor. Meaning, when more of a product is wanted by consumers, more laborers are required to help…

the cost of producers is consist of three parts, first is that the labor cost and anticipated value for products, the second is that the resource cost of product and the cost for protection and maintenance of the environment in the process of manufacturing is the third part. However, without external force, the real cost of a company is subject to the first and second part while pushing the company to consider the third part with external force will be the essential tool to address the…

What does a firm do to gain a consumer 's attention? They give consumers coupons and offer rebates. The marginal benefits of coupons are good for consumers who want to waste time looking through, and then cutting out coupons. However, it can be considered price discrimination. The implicit cost for many consumers is too great. Many people don’t have the time to go through hundreds of coupons, cut them out, carry them around, and then give them all to the cashier. Coupons can be both a hassle and…

quantities produces by the first and by the second firm (q = q1 + q2). The inverse demand function is given: P (q) = A – q, where A is a constant, bigger than 0. We know that the market price should be positive. Therefore, A > q. We can also graph the function. The horizontal intercept and vertical intercepts both are A, and the slope of the function is -1. We know that the price is uniform across the market. Therefore, for each of the firms the price equals P (q1+q2) = A - q1 -…

Cocktail Party Economics discusses the topics of efficiency and equity within certain conditions and markets. As it says in MEL, efficiency means operating at the lowest possible cost for whatever a company is producing. When an economy is considered efficient, any attempts to make something better off would not be possible without making it worse. Furthermore, production is efficient when the production is produced at the lowest possible cost along with variable inputs of production as it says…

Q2. What is an inferior good? If the price of an inferior good falls what can we say about the quantity consumed? Explain Definition Consumer’s demand for goods depend upon the level of income. Inferior goods are defined as goods for which quantity demanded decreases with an increase in consumer’s income and quantity demanded increases with a fall in consumer’s income. This happens when the goods have relatively expensive substitutes available whose demand increases when the consumer becomes…

Homo economicus or the economic man can be referred to the concept of many theories of economics. It portrays human beings as self-interested and rational agents, who pursue optimally the subjectively defined ends. Homo economicus maximizes the utility as the customer and profitability as the producer. The whole theory is compared to the different concepts of economic behavior, cognitive biases as well as homo reciprocans. In the game theory, the homo economicus is related and associated with…