Marginal cost

in the future. As mentioned in the case, most of the tankers are fully depreciated. In other words, these aged tankers may lead to higher possibility of breaking down during delivery of PHSB. It is considered cost inefficient when high maintenance cost incurred repeatedly because it will cost a boom to PHSB. As a good recommendation, the tankers must be properly scheduled for regular maintenance checks. This is because preventive maintenance can avoid high repair and replacement…

tomorrow. Some basic assumptions for intertemporal preferences are transitivity, consumer prefer more over less, and consumers can choose between two alternative streams (today versus tomorrow). A decision requires a trade off by the consumers between costs and benefits today and tomorrow. The more a consumer consumes today, the less saving he will have today which will result in less consumption tomorrow. When consumers make consumption decisions they have to take into account their future…

For the Marginal Analysis Paper, my business will be producing maple baseball bats. After some research, I found that these kind of baseball bats can be produced for about $60 per unit. Fixed monthly cost for my company are $2375, which includes rent and utilities. With that information, a cost function of C(x)=60x+2375, where x is the quantity of units, can be used to determine the monthly cost of running the business. The Price-Demand equation for my hypothetical company is x=f(x)=8500-25p.…

the short run and long run costs are U-shaped within a business. Short run costs refers to the cost a company will experience in a period of time in which costs are variable, e.g. when a company is releasing a new product. However long run costs refer to those over longer period of time, typically, over the entire product lifecycle. In this essay I will address some of these reasons and explain how they differ from one another in a corporate environment. Short run costs are originally high due…

The Life-Cycle Hypothesis (LCH) explains the saving and dissaving behavior of consumers via the life-cycle stages of a household. The LCH posits that spending and saving will vary as individuals attempt to hold their marginal utility of consumption constant as they transition through the various stages of the life cycle. The three stages of the life-cycle consist of young, middle-aged, and retired members of a household. As households venture through various stages over the life-cycle, each…

capital structure theories, a decision maker managing a firm evaluates the various costs and benefits of alternative leverage plans. Often it is assumed that an interior solution is obtained so that marginal costs and marginal benefits are balanced. The trade-off theory of capital structure refers to the concept that a firm chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The trade-off theory grew out of the debate over the…

Total Utility: The amount of satisfaction gained from consuming something. Marginal Utility: The amount of satisfaction gained from consuming one more unit of something. After it reaches zero, it starts to negatively affect total utility, Diminishing Marginal Utility: The usefulness (or utility) of a good or service declines as one has more of it. For example: if one has a single pair of khaki slacks, the pair will be worn every day. If one has eight pairs of khaki slacks, then each pair is…

1.1 Purpose The purpose is to analyse an issue regarding the cost allocation among divisions and how to better allocate the maintenance service cost internally and enhance the efficiency and motivation of their performance. 1.2 The issue The method provided by Johnson leads issue to the Delta Division because it cannot be implemented in an optimal manner. Additionally, Johnson promised that the Delta Division only needed to pay $10,000 monthly after the conversion of its maintenance service…

about the number of grandstand seats to be sold. He believed that the grandstand seats will be based on three probabilities; high, medium and low sales which could be 80,000, 50,000 and 20,000 respectively. Moreover, his decision could be based on a cost estimates and order size (10,000, 7,500 and 5,000) from silk screener/shirt supply house. Before making the decision he should consider all the financial outcomes and volume of sales that will range from 5 to…

for staffing could therefore rise as an administrative assistant would be highly beneficial per region. In doing this money would be saved and not compromised. With the company being non-profit based company there is not a lot savings to rely on. Costs for this type of care may have to increase in order for all the company to be and…