Define the price elasticity of demand and show how it is calculated. Answer: The units-free measure of the responsiveness of the quantity demanded of a good to a change in it s price when all other influences on buying plans remain the same. 3. What is the total revenue test? Explain how it works.
Point (parenthetical documentation) a. Explanation/sub point b. Explanation/sub point 2. Point (parenthetical documentation) a. Explanation/sub point b. Explanation/sub point III. [Main idea] A. [Topic] 1. Point (parenthetical documentation) a. Explanation/sub point b. Explanation/sub point 2.
(p. 191) ______________ theory is typically associated with greater profits. a. Signaling b. Compensating wage differentials C. Efficiency wage d. Human capital 4. (p. 193) Implications of _______________ theory are that pay level affects an employer's ability to recruit.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007). The second way a firm that’s into profit maximization can decide its greatest level of output is by way of the marginal revenue -- marginal cost method. This is done by subtracting the marginal cost from the marginal revenue that a product generates. Using marginal cost and marginal revenue as the bases, profit maximization will be obtained at the point when marginal revenue is equal to marginal cost. If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost.
1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
EGT1 TASK 1 McConnell, Brue and Flynn define Marginal Revenue as “the change in total revenue that results from the sale of one additional unit of a firm’s product; equal to the change in total revenue divided by the change in the quantity of the product sold.” (McConnell, Brue and Flynn, 2012). When we look at the relationship between total revenue and marginal revenue we can see that it is purely a mathematical relationship. The formula that is used to determine Total Revenue is the following; Total Revenue = Price X Quantity, (TR = P X Q). McConnell, Brue and Flynn also define Marginal Cost they state that it is “the extra cost of producing one more unit of output; equal to the change in total cost divided by the change in output.” (McConnell, Brue and Flynn 2011). The marginal cost and total cost is directly related to each other.
ANS: A value of the product to consumers. DIF: 1 SECTION: 1 TYPE: M 41. The height of the demand curve shows a. how much each buyer in the market is willing to pay. b. the willingness to pay of the marginal buyer. c. the maximum price all buyers will pay for a product.
Profit Maximization is the process that a firm uses to establish where the best output and price levels are, in order to maximize its return. There are two primary methods that can be used to establish profit maximization. One method is the Marginal Revenue minus the Marginal Cost (MR-MC) method. When utilizing this method economists assume that profit would be at its highest when MR and MC are equal, which denotes that for every item made MP=MR-MC. When / if MR is higher than MC then MP would result in a profit for Company A.
State in a few words, what is an exponential function? What is the natural exponential function? Evaluate 4–1.5 using a calculator. Round your answer to three decimal places. The formula S = C (1 + r)^t models inflation, where C = the value today r = the annual inflation rate S = the inflated value t years from now Use this formula to solve the following problem: If the inflation rate is 3%, how much will a house now worth $510,000 be worth in 5 years?