Essays on Marginal Cost

The Canadian healthcare and social assistance sector falls under the NAICS classification. The sector entails a publicly funded healthcare system. The sector is guided by the provisions of the Canada Health Act of 1984 (Belchetz). The sector, relative to its peers in most other countries including the U.S and Mexico, is unique. Its uniqueness arises from the fact that despite being predominantly publicly funded, most of the healthcare services at the point of sale are provided for by private practitioners. The Canadian healthcare and social assistance sector has been billed in many quarters as a model to be followed ...

Analysis

A monopoly is when a single business or other organization has complete command and control over a market. It does not mean that they are the only competitor in play. However, it does mean that the single organization in question is not in any way threatened or competed with given the conditions of the market in question. Generally, monopolies are illegal. This is due to the Sherman Anti-Trust Act that was passed in 1890. That law can be used as a means to break up companies that are seen as monopolies. Precisely this was done with Standard Oil Company ...

What are the determinants of the Deadweight Loss?

Introduction The deadweight problem happens when the government through an attempt to increase their earnings from the goods in a country increases the taxation on them. It happens when they impose a certain amount of tax on certain commodities in the market and the end consumer as well as the producer in charge of the production process forced to lose the whole or part of their surplus. The loss they both suffer is the deadweight loss. The government has the right to earn some form of income from the trade activities within their borders. However, they also need to ...

Question 1:

Suppose you are given the following: At output level of 6, what will be the marginal cost? Less than 2 Exactly equal to 2 More than 2 Given information is not enough to find out marginal cost Why is this? Question 2: What explains the U-shape of the AC curves in the short and the long run? Shapes of both, short and long run AC curves, are explained by the law of diminishing returns Law of diminishing returns explains the long run AC curve while economies and diseconomies of scale explain the short run AC curve Law of diminishing ...

Current market conditions competitive analysis

Estee Lauder Cos.Inc Estee Lauder Cos. Inc is an American based company that manufactures and markets prestige skincare, fragrance, hair products, and makeup. The company has owned various investments of labels that are internationally distributed to give it a global reach. It establishes departmental stores in various regions. Estee Lauder Cos. Inc has achieved a global leadership in by delighting its consumers with a variety of transformative products, high consumer experiences, and improved capacity to inspire its consumers to express their beauty with its prestigious products. The company is focused solely on its specific beauty products with more than ...

The Impact of the Guaranteed Price Policy on the European Sugar Market

Sugar industry is one of the most dynamic in the structure of the food industry and plays a significant role in the economies of several countries. The European Union leads the five largest importers of sugar. Sugar production in the EU is expected to grow by 10% in the 2017/18 season. The production may reach 18.3 million tons, but still will be lower than the record 2014/15 season (19.4 million tons). Sugar production growth is expected in France (up to 5.5 million tons) and the UK (up to 1.4 million tons). However, despite the increase in production, the EU ...

Economic short answer

2.a. To maximize profits, it is necessary to produce the quantity when the marginal revenue is higher than the marginal cost. In Q=8 the marginal revenue is higher than the marginal cost, from Q=9 the marginal revenue is lower than the marginal cost. Then the answer is Q=8. 2.b. The data represents a not perfectly competitive firm because the graph is not horizontal, but a downward-sloping demand curve (Piana). 4. A downward-sloping demand curve says that the final price of an article at a crescent quantity will decrease reducing the marginal revenue of the last produced article. 5. The ...

A free market economic system is a method of allocating resources, which is based on the market price. Prices are determined through unrestricted competition between the state and privately owned business entities

Command system works best when there are extreme market imperfections and uncontrolled monopolies

A command system works badly when the government control most of the resources and discourage fair competition because it leads to inequalities and poor quality of goods and services. The contest method of resource allocation works efficiently because increased competition ensures fair prices of goods and services. Additionally, the wage rates are high and the quality of products and services improve as various market players strive to ...

American Public University

In this paper, I will analyze the advantages of creating a business in the form of corporation and cost structures of companies. Companies develop some strategies to have the possible least cost of production and gain an advantage in competition. Preference for forming an organization is the first step. Corporation legal structure presents some advantages to companies. Also, companies need to have full knowledge of costs to be able to manage costs to maximize their profits. Eventually, this paper will give some insights about these subjects. Corporation is a legal form of building an organization for a company. Operating ...

Externality takes place when action of one agent exerts direct impact on welfare of other agent, and this impact is not transferred by market prices. When there are externalities in the market, the social marginal cost is not equal to private marginal cost. Positive externalities compel market to produce less than the socially desirable quantity (Gans, King & Mankiw, 2011). Positive externalities are present in the economy when marginal social benefits are greater than marginal private benefits (Cypher, 2014). There are, however, several examples of economic activities that pave the way to production of positive externalities such as:

Provision of Education

Industrial training ...

Question 1 (a) two examples of badly-behaved preferences about Economic Theory and Principles

The first badly behaved preference is a situation where an individual prefers inferior goods to superior products when indeed they are in the financial position where they can comfortably afford such goods. Some of the inferior products include some of the staple foods that are in existence. With an increase in income levels, individuals tend to shift to superior products. It would appear uncommon to stick to a product that naturally belongs to a lower class. In real life situations, when incomes increase, people tend to change their shopping malls and even the foods that they eat. Furthermore, they ...

Overview

The company upon which this market analysis is based is Estee Lauder Cosmetics INC. The history of Estee Lauder Cosmetics INC. can be traced back to 1946 when the company began operations. The founder of the cosmetics company was Estee Lauder. The premise upon which the company was founded was that there is an inherent beauty in every woman. The company has added more products its product line as a mark of its continued growth over the many decades the company has been in operation (Estee Lauder Cosmetics INC., 2016). Over the seven decades in which the company has ...

According to the modern market trend, the microwavable foods offered by brands such as Healthy Choice and Lean Cuisine have become a convenient option and an easy diet solution for busy people. These microwavable foods are easy to prepare and consume for the people having hectic lives. Thus, there are two growing competitors for this industry of low-calorie frozen, microwavable food. These two competitors have several common factors in their products such as product types and variety, nutritional level and price margin. However, according to the recent financials, Lean Cuisine and Healthy Choice, it had faced a significant drop ...

Out of the many options that today’s generation want easy is the food options. And this easy option is provided by frozen meals of the microwave like Lean Cuisine and Healthy Choice. They also offer favorable solutions of diet for current generation people who are busy. As a result of the growing demand, the competition is also growing and there are two major competitors in the low-calorie, microwavable frozen segment of food industry. There are a number of common factors between both the Companies like the type of product, the value of nutrition, and the price. Another similarity ...

Introduction

Receiving education is a costly choice. There are costs to education in terms of direct monetary payments and an opportunity costs. The choice to go to school means forgoing waged employment. Therefore, there is an opportunity costs of the wages that would have been earned. Therefore, there is a need to compare the returns versus the cost of education to make optimal decisions. Estimating the returns to education for any population segment is useful in making decisions on the optimal schooling level at both a personal as well as societal level. From a policy standpoint, estimating returns to education ...

Two of the top companies in the low-calorie frozen, microwavable food industry

In modern life, people are becoming busier, thus, they spend very little time for traditional cooking. Due to growing demand for convenient food and thanks to the development of advanced technology, microwave becomes a useful and common tool in kitchen which helps people to save a lot of cooking time and effort as well as preserve the taste of food. The prevalent use of microwave in every household leads to the growing need for microwavable food. For this reason, many low-calorie frozen, microwavable food companies are found to provide high quality food with convenient way of cooking . At the ...

Abstract

Market structure refers to the interaction between various buyers and sellers. Different market structures have different characteristics. The characteristics of the market structure determine the realized outcomes. There are three main market structure: perfect competition, oligopoly, and monopoly. Perfect competition has many sellers. Therefore, they do not have any market power. They cannot influence market outcomes. An oligopoly has few firms with some market power. They can influence the outcomes. Monopoly comprises of only one firm with absolute market power. Therefore, it can influence the realized outcomes. This paper highlights the characteristics of the various market structures. It then ...

Assignment 2: Operations Decision

Assignment 2: Operations Decision IntroductionCurrently, the options for microwave foods with low calorie have widened in the market. As the income of the people has gone up, the consumers can now have higher affordability towards an easy way of living; thus allowing for a change in the traditional rigorous ways of cooking used in yesteryears. Microwaves have now somewhat replaced the cooking methods used traditionally. As the popularity of microwaves has increased, the use of food items related to the same has also enhanced. Since there is such wide variety available for products, there can be an easy target ...

Part A: Multiple Choice Questions:

The seller must have market power, that is the seller must have some control over price The seller must be able to identify different customer groups with different demand elasticities The seller must be able to prevent arbitrage between the two groups All of the above You’ve just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from the line addition if you estimate the following:

There is a 70% chance that profits will increase by $100,000.

There is a 20% chance that profits will remain the same. There is a 10% chance that profits will decrease by $15,000. Loss of $15,000 ...

Externalities take place when consumers/manufacturers activities have an unintentional or indirect impact on other consumers/manufacturers without affecting prices. According to Sankar, externalities may cause positive and negative effects (6). In other words, if the consumer or a group grants certain benefits to other economic agents, the externality is positive; if any activity is disadvantageous to other groups or individuals, then the externality is negative (7). According to Stiglitz (216), “Externalities arise whenever an individual or firm undertakes an action that has an effect on other individual or firm”. The externalities phenomenon tends to have a spillover effect in the ...

Business Cycle Case Study

Introduction Business cycle refers to the unsteadiness in business activities within a given economy over a given time. The business cycles are mainly characterized by periods of recession or expansion. During periods of expansion, the economy is experiencing growth, this is indicated by factors such as; increase in the rate of employment, increase in production processes within industries and increase in sales as well as incomes. The period of recession is when the economy is experiencing a contraction. Indicators of contraction in an economy are; unemployment, decrease in production processes and a decrease in sales and incomes.( Stock, pp ...

Introduction

The pricing strategy should be an integral part of decisions in the marketing position, and it should depend on the overall development strategy of the business and marketing plans. Therefore, companies should not set one price but a pricing structure that should reflect on the variations in geographical demand, costs, the timing of purchase, requirement of market segments, order levels, the frequency of delivery, and service of contracts.

Why different pricing strategies are appropriate in some circumstances

Pricing is an important managerial decision, and most firms do not encounter pricing decisions in major ways on daily operations (Weygandt, Kimmel and Kieso, 2009, pp.59). However, there is a need ...

Micro Economics

Q1.The demand of labor is said to be derived demand. What is the meaning of derived demand? How does this concept help to determine the demand of labor? Ans. A firm demands an input in order to produce a commodity demanded by consumers. So, the demand for an input is a Derived demand. If the input is labor then the demand for labor is derived demand as firms employ them in the production process which contributes to their revenue and profits .The demand for labor is determined form the principle of profit maximization. The demand for additional amount of ...

According to Name, the labor market “is the institution by which workers and employers come together to engage in the production of output” (Name 297). A distinctive feature of the labor market is fixed level of wages and its correlation with a number of working hours. Key issues of the labor market are health-related issues, issues related to labor supply, and the ones related to total compensation. Health-related issues state that healthy worker is more productive than workers with health problems. Labor supply issues determine a correlation between the health status of the worker and his or her employment. ...

In the prevoius cases, we analysed about the pricing and various output for the low calorie frozen microwavable food company. Now, in this paper we will be analyzing about various plans that the manager of this food company can follow. The various pricing strategies shall be adopted by the manager to make their products responsive towards the price change. The impact of various government policies on the product and employement needs to be accessed. In the summary, this paper will access various strategies that managers needs to undertake to mark the substantial impact on the market and access the ...

Introduction

Knowing the market is very important for a firm as it has to base its policies and profit maximizing decisions based on the market characteristics. In a perfectly competitive market the firms follow the price determines by the industry. On the other hand a monopolist sets the price and quantity based on the profit maximizing conditions. The monopolist earns higher profit than the firm under a competitive sitation. In a monopolistic competition the firms have to innovate so that the products can be differentiated from the products of the consumer. The oligopoly form of market is characterized by the ...

Introduction

The strategic planning for the successful operation of a firm pivots on the market structure in which the firm operates. The market structure determines the market power that the firm possesses or can command into. If the market power is low or absent as in case of a competitive market the firm has to follow the industry determined price. But if the market power is high as in the case of a monopoly the firm can earn substantial amount of profit by its pricing strategies. In the previous exercise we had derived the price and output of a firm ...

Introduction

The market structure in which a firm operates determines the strategies that the firm should follow to maintain steady growth in revenue and profit. The market structure influences the pricing decision and also the decision to innovate and diversify in the product. The sales promotion activities are also a great deal dependent upon the market structure in which the firm is operating. To know the market structure we have to understand the degree of competition existing in the market. If there are a large number of firms producing similar products and none of the firms have the power to ...

Introduction

Price discrimination is a strategy usually followed by a monopolist or even oligopolist where different consumers are charged different prices. Price discrimination can take three major forms, first degree price discrimination, second degree price discrimination and third degree price discrimination. In this paper we demonstrate how third degree price discrimination is practiced by the Airlines. We begin with a brief description of third degree price discrimination in the next section. In section III we discuss the methodology and data source of our research. In section IV we present the outcome of our research. Section V concludes the study.

Concept of Third Degree Price Discrimination

In ...

1. Plan for the assessment of Market structure Effectiveness for Operations of the Company. It can be easily asserted that the performance of the company as well as the market scenario changes whenever there are changes in the demand for a certain product over a period of time. It was observed that there is increasing trend in demand for microwave category. With the pressure and increase in complexity of individual lives and their living standards, the attitude and perception of people towards microwave food seems to be favorable. Such microwave food is also increasingly demanded as a result of ...

1. Plan for the assessment of Market structure Effectiveness for Operations of the Company. When there is a fluctuation in the demand for a certain product from one year to the other, we should understand that market and Company performance are changing. There can be observed a decent increasing trend for the products in the microwave category. The complexity of individual lives is increasing and as a result, the perception towards microwave food items is favorable. The savings in time and the wide range of choices could be taken as the main reasons for these types of goods selection. ...

1. Plan for the assessment of Market structure Effectiveness for Operations of the Company. Analysis of the performance of microwave category can be done through the increase or decrease in the demand between years. The analysis shows that the demand is ever increasing for microwave category products. The perceived advantage of using microwave foods has increased as the life of people is becoming more and more complex. The advantages could be summarized as time saving, greater appeal since it is a gourmet meal and the variety provided. The multi-use of the products at any time of the day in ...

Market Structure

A firm has to be well aware of the market structure in which it is operating so that it can take appropriate pricing and output decisions that maximizes its profit and market share. If the market is competitive in nature the firm would follow the price determined by the overall industry demand and supply. On the other hand a monopolist would decide the price that would maximize her profit or the price that would keep potential entrants into the industry at bay. The demand analysis that we had made previously can give us some idea about the market structure ...

Analysis Tools

Analysis Tools The aim of this financial and analysis report is to evaluate the performance of Ford Motors as one of the companies enlisted in Fortunes 500.

Accounting for assets The Ford’s net property is valued at a cost, less the accumulated impairments and depreciation. The company capitalizes new assets when the management expects to utilize such an asset for more than 12 months. The company also expenses the repair and maintenance costs as they occur. The cost of depreciation is calculated by the use of the straight-line approach over the approximated useful asset life. The straight-line method ...

Introduction

In the present business world the assumption is that firms would like to maximize profits, but in the real life maximizing profit has a great impact on the society and the economy (Wigley 1996). Firms are classified according to the type of market structure they belong to. There are four types of market structure; perfect competition, monopoly, monopolistic, and oligopoly. The main factors that influences a market structure are; the number of buyers and sellers, the degree of product differentiation, the knowledge of buyers and sellers regarding a commodity and the strengths of barriers to entry and exit. Different industries ...

Answer 1)

A monopoly is characterized by one seller, well define product that has no substitutes. For a firm to maintain its monopoly position, it is essential that the barriers to the entry to the market are high. Although, this kind of market structure leads to deadweight loss in the society by producing lower than efficient output, but still there are many instances as in case of natural monopoly, where a society is served better by the monopolist than a competitive market structure.

A natural monopoly exist in a industry where a single firm can produce output such as to supply the market at lower ...

Different Market Structures

- The different market structures are summarized in the table below (Template A). - Examples of different market structures

- Perfect competition – New York Stock Exchange In the NY stock exchange there are many small firms that offer the same type of services (brokerage). The fees charged by these firms have very little variance. There is also very little government intervention on how to compete in the market, and as such, any person can enter and exit the market at any time.

- Monopoly – Energy distribution Electricity distribution is a monopoly. Normally there is only ...

Introduction

The objective of any firm is to maximise profits and increase shareholders’ wealth. This objective can only be attained if the market structure is favourable for the operations of the firm. The market for low-calorie microwavable food has changed from perfect to imperfect competition. This paper discusses the effectiveness of the new market structure to the operations of the company. It also assesses the profitability of the firm based on the cost functions and the demand function from assignment. In addition, the paper explores was in which the company can improve its profitability as well as the circumstances under ...

Managers as well as accountants need financial information to help them make managerial and accounting decision that are very crucial for both internal and external consumers of this information (Drury 2008). To be successful in this area both managers and accountants need to have full understanding on the different types of cost and their calculations. There are different ways of classifying cost for example, manufacturing costs verses Non-manufacturing costs, fixed costs versus variable cost and finally product cost versus period costs. The most important thing that managers and accountants need to know is how to treat variable costs and ...

The two concepts of accounting are very vital when it comes to the realization of the ones profit in a given business premise. They enable the manager to come up with the best policy in realizing the best profit for a given sale. They depend on the ability of the sales being on a fixed cost or at some points it can rely on some factors like the case of the absorption costing which is believed to be an absorption that is based on all issues dealing with the manufacturing costs into the issue of the inventory rating.

The various costs that ...

Part A

Education is one of the major concerns that any government addresses. The world nations embrace education as the key strategy towards attaining economic growth and development. Politicians have advocated for a constant funding to the higher institutions hence low fees to enable high standards of education. This is an aim to improve its accessibility as a way of enhancing skills in the society and more so increase innovation, science, and technology (Levin, 2005).

In a case where the government maintains a constant university funding, the demand for higher education increases in the country. The initial equilibrium price for education will decrease due to ...

Question One

Variable costs are the costs that are directly proportional to the level of output. These costs are low in case of low output and increase with the increase in the quantity of commodity produced (Mankiw G. 2011). For this fishing business, the variable cost elements include the labor costs, the cost of fuel as well as bait, ice and equipment costs. This is because at low output these costs are low and increase gradually with the increase in the quantity produced.

Question Two

The labor cost per unit curve drops until a minimum of $0.17 with 5000 units produced after which the ...

a) Why the OPEC oil cartel succeeded in raising prices substantially while the Intergovernmental Council of Countries Exporters of Copper (CIPEC) copper cartel has not.

The Organization of the Petroleum Exporting Countries (OPEC) has succeeded in raising the price of oil substantially. For example, during the 1970s, the oil prices were increased by over 700 percent and this made the exporters of other natural resources imitate the OPEC model including the Intergovernmental Council of Copper Exporting Countries (CIPEC). However, CIPEC, unlike OPEC has failed to increase the price of copper. A number of reasons can be attributed to OPEC success including its control of about 76 percent of the world’s oil supply (Levenstein & Suslow 2006). Moreover, Oil has inelastic demand because it ...

Barbie Dolls and Accessories

Why might Mattel set a much lower contribution margin on its Barbie dolls than on the accessories for the dolls? Contribution margin is the profit per unit of output; it is acquired by subtracting the unit variable cost from the unit cost of the product. Low contribution margin is experienced in products that are labour intensive while high contribution margin is for capital intensive products). In the above case, Barbie dolls have a lower profit as compared to the accessories of the dolls.

There are two ways of increasing a contribution margin: increasing the price or decreasing the variable cost. However ...

According to Shaun and Gottret (2004), the residual curve refers to the individual demand curve of a firm that is the part of the market demand which is not provided by other competing firms in the market. It can, therefore, be defined as the market demand function after it has been subtracted from the quantity supplied by other competing firms at each price. Suppose the market demand is D (p) and the supply provided by the other firms is S o (p), then there are several ways to calculate the demand for the firm. The first one is by expressing the relationship ...

The Washington Post article entitled, “Rich Californians balk at limits: ‘We’re not all equal when it comes to water”, written by Rob Kuznia discusses the ongoing drought and the response of certain Californians to the drought. The article perfectly exemplifies economic issues such as scarcity, elasticity, maximizing behavior, and government regulations on goods. California is in the midst of a historic drought, and many residents of the wealthy community of Rancho Santa Fe feel that if you can afford to pay for more water, you should be able to. This goes a fundamental question of economics; how a scarce good ...

About the paper

In the words of eminent economist, A.A. Cournot, ‘’ The term market structure refers to the nature and degree of competition in the market for goods and services’’, and this paper is commissioned to discuss various forms of market structure, Perfectly Competitive, Monopoly, Monopolistic and Oligopoly, and how their varied characteristics affect the life of an average consumer and the society as a whole.

Perfectly Competitive Market

In the words of A. Koutsoyiannis’’ Perfect competition is a market structure characterised by a complete absence of rivalry among the individual firms.”

Below discussed in detail are the multiple characteristics of perfectly competitive market:

i) Number and nature of sellers A perfectly competitive market structure is characterized by large number ...

Abstract

The paper dwells on general equilibrium theory by putting into perspective various critical issues. The origin of the concept of general equilibrium theory is illuminated dating back to neoclassical period. Moreover, various models such as Walras model of pricing and modern equilibrium model is also put into consideration. Finally, the importance and application of general equilibrium has also been discussed at length. General equilibrium theory refers to a concept modeled around theoretical economics. The modern general equilibrium takes into consideration three important interpretations which should be taken into consideration. The idea of general equilibrium theory cannot be complete when there ...

INTRODUCTION

In this information age, the digital revolution has transformed the industry to an information based economy. Since the late 1970s, the day to day evolution of technology has shaped the modern society by introducing globalized communication. The UK mobile phone network industry is developing day by day by introducing the new-tech systems in the market. O2, Vodafone, EE, T-Mobile, and Orange are the biggest mobile phone network providers in the UK (Rushton, 2012). This report has presented a thorough economic analysis of mobile phone network industry in the UK, considering the biggest network providers in the country.

ANALYSIS OF MOBILE PHONE OPERATORS IN UK

Mobile Phone Network ...

INTRODUCTION

In order to come up with effective and efficient strategies, it is important to understand the dynamics of different market structures. Different market structures have different characteristics and features and operate differently. In this report, an attempt has been made to understand the different market structures and comments have been made on the different features and characteristics of these market structures.

MARKET STRUCTURE

A market is a group of individuals, firms and economic agents, who have interaction with each other as a buyer and seller. In economics market structures are defined into four main types, and that are perfect competition, monopolistic competition, monopoly, ...

Mathematical Modeling

In an analysis of the economic condition of both enterprises and the larger subject of the national economy applies dismemberment problem or situation into smaller questions. This allows the procedure to the study of the logic which is a simulation. In particular, this method is applicable to the social processes that, among others, form the socio- economic system. Thus, we are able to understand the factors that determine the social conscience and the state of the productive forces, the institutional framework of the society. Modeling of social processes is an important part of mathematical methods in economics that highlight the ...

Business Report based on Excel Sheet workings and calculations

For the application of this paper, it is required that a comparative study in different scenarios be conducted to understand the implications of economic models and pricing theories on two products – brand X and brand Y. The data for this paper has been collected from actual supermarkets and by using analytical techniques it would be seen how the marginal cost, revenue and other economic functions react when the market scenario changes. These two brands – X and Y, are available in two versions, one is the regular version and the second one is a light version or the lite version. For ...

Introduction

Economics is a field which has its active recognition n almost every walk of life and it is an important thing as well . Alfred Marsha and Adam Smith are known as the founder of Economics who invented it. According to both of these individuals, Economics is the name of how to earn the money and how to consume it in a perfect and well organized position. There are two different branches of economics, which are microeconomics and macroeconomics. Microeconomics is the branch of economics that deal specifically with the economics of individuals while macroeconomics is the name of economics that ...

Recommendation on approach to follow in the installation of a company real-time vehicle locator

In a medium-sized town from the west, the system of vehicle-locating should rhyme with the geographical size of the town. Some of the factors that are supposed to be considered are the strength of the signal, which will lead to viability of the location process of the vehicles that are installed with the tracking device within the town. Ideally, there are a number of issues that should be identified and solved. In a dense urban centre, there are factors that are essential before determining the strategy to install the system. These include the density and structures of buildings are medium in ranging, ...

Cost is an important measure which is extremely vital for an organization in particular. There are two different types of cost, which particularly are fixed cost and variable cost and it makes a total of Total Cost. Both of the types of costing are essential for a company to incur. Every organization tries to decrease the cost of the company in order to increase the financial belongings resultantly. Apart from the fixed and variable cost, financial risk is yet another important provision on which the entire capacity of an organization depends upon . The prime theme of this assignment relates to a company ...

The fundamental rule of economics is that it is a study of interaction of various market forces for utilization of the limited resources towards the satisfaction of unlimited demands of the society. The interaction and power of the forces of demand and supply determines the nature of the market. Microeconomics is the study which deals with the interaction of the individual demand and supply forces. The nature of such interaction and the relative influence of demand and supply forces would determine the kind of competition that exists in the market i.e., perfect competition or imperfect competition. The paper has been ...

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Essay 1

The Diamond-Water Paradox first appeared in Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (30) to illustrate the irony of value as seen by consumers and traders. It since became a classic analogical centerpiece among subsequent economists to explain their respective theories of value. This essay gives a snapshot of Smith’s original description of the paradox, followed by David Ricardo and Eugen von Bohm-Bawerk.

Adam Smith’s ‘Paradox of Value

So goes the ‘Diamond-Water Paradox’: “Nothing is more useful than water; but will purchase scarce anything; scarce anything can be had for ...

Introduction

Airline companies charge different prices for different classes of passengers. A passenger who wishes to have higher quality services during the flight must pay a higher price for their tickets than those who travel in a different class. The airlines differentiate the prices of customers by having different features in the categories. However, there are other instances when the customers’ ability to travel in the business class is limited by their level of income. Pricing is one of the strategies used in maximizing revenues for the airline companies. The companies, therefore, must take into account the factors that affect demand for ...

According to the podcast on planet money, I agree with the economist on what the government should spend money on, that is, autopsies, defense, police force and building of lighthouses on coastlines. Autopsies are beneficial to the families of the deceased to know what the cause of death for their loved one was.The economist further adds that there is a current provision by the US Congress on the provision of public goods to include autopsies. The defense and police forces as well bear characteristics of public goods. They benefit the whole population and should not be provided by the market ...

Will you be replaced by an app?

Under the cost minimization rule, the firm only employs purely labour human labour when the marginal physical product (MPP) of having a machine in place of the human labour is very low. In this sense, it happens when a firm finds it more cost effective to have human labour i.e. the marginal physical product of the worker is higher than the marginal physical product of the machine. When the marginal cost of operating a machine exceeds the marginal revenue product of that same machine, then the firm will automatically utilize only human labour since the marginal cost will be lower and in ...