There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices. This is what some firms in the leisure industry will aim to do, for instance, Cinemas will hope to achieve the highest level of profits. Although most firms in the leisure industry aim to maximise profit, some firms have other main objectives, such as to maximise growth. Growth maximisation is where the firm’s main goal is to increase the size of the firm as much as possible.
The business cycle is a series of cycles that define the economies and a business’s stages of expansion and contraction. The first stage of the business cycle is the Boom stage, this is where there is high level of customers spending, there are high levels of business confidence, and an increase of profits & investment. Unemployment is also low as the business creates jobs. The next stage is the Recession stage, this is where the high levels of customer spending start to decrease and business confidence means that lower profits and the business will have to start cutting back on investments which starts to increase unemployment as the business is forced to cut back on resources. The next stage is Depression, this is where there is a lengthy period of declining Gross Domestic Product (GDP) – this is where there is little to no customer spending (there is some increase in the rise of employment).
MKT 571 Week 4 Quiz Latest UOP Assignment 1. Which marketing system is another channel development in which two or more companies put together resources to exploit an emerging market opportunity? • Strategic marketing system • Vertical marketing system • Horizontal marketing system • Conventional marketing system 2. What is the practice that allows companies to maximize their market share by believing a higher sales volume will lead to lower unit costs and higher long-run profit while assuming the market price is sensitive? • Market-penetration pricing • Sensitive pricing • Target pricing • Market skimming To download the complete answer check MKT 571 Entire Course 3.
(b) (1) LIFO will yield the lowest gross profit because this method will yield the highest cost of goods sold figure in the situation presented. The company has experienced rising purchase prices for its inventory acquisitions. In a period of rising prices, LIFO will yield the highest cost of goods sold because the most recent purchase prices (which are the higher prices in this case) are used to price cost of goods sold while the older (and lower) purchase prices are used to cost the ending inventory. (2) LIFO will yield
The customers feel good. They spend more because they have jobs and sable income. More money is collected by the government from income taxes and VAT. The last, factor the prices tend to increase because of high demand so the inflation is rising. Recession- The recession is an opposite of boom stage.
There are reports that say the economy will grow over the next few years (2010), but there is a possibility that they could be wrong and that won’t happen. If the opposite happens and the economy hits a decline, this could really hurt the business of Keystone and many other companies for that matter. On that note, people will start looking to save money and if they can find the same product that this company offers for a cheaper price, they might just do that. The last red flag that I would see when deciding whether to select this client would be the fact that they have recently started extending credit to customers with less than perfect credit (2010). Although this could mean nothing, this could also be the beginning of a downward spiral of bad debt.
A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Etisalat as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more money to spend on luxuries instead of the essentials it means that the higher value products will be brought. For example the Andrex toilet rolls will be brought instead of Etisalat value, because of this it means more money is being spent in the store which is an advantage for Etisalat. Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers.
The report concludes with a critical assessment of Buffet’s investment philosophies, looking at the impact it has on Berkshire Hathaway and why it is difficult for other investors to replicate Buffet’s strategy and be as successful. The findings indicate that the market reacted positively to the deal, especially for Berkshire Hathaway, beating the average response to an acquisition being announced by over 4%. The increase in Berkshire’s value represents the stock markets opinion on how much they underpaid. Using the enterprise value multiples method, the report finds that the book value of Pacificorp to be $9.2bn, $200m less than the offer value. This implies there is significant intrinsic value when combined with MidAmerican, the new customer base and economies of scale being the 2 most important factors.
The price of fuel does influence them though, the biggest benefit is the effect on the customers, the lowering of the price of fuel means that people will, in effect, have a small pay rise, this will help KI as this will increase their customer’s disposable income and increase their consumer confidence. KI will always have oil related costs linked to their business as they use energy that is produced from oil and resources that wouldn’t be possible without oil e.g. polymers. The lowering of the oil price will help KI to maximise profits as they will be spending less on things that are oil based. KI may see people coming from further afield as the customers may thing that this drop in fuel price will allow them to live further away from their jobs or travel further to work.
George Kamencak, ʻAustralian consumer law reforms : offering greater consumer protection and simplifying interstate trade.ʼ (2011) BULLETIN (LAW SOCIETY OF S.A.) 33 (1) February 2011 : p. 24 5. ʻEditorialʼ (2010) 38 Australian Business Law Review 81 6. Stephen Corones, ʻThe Australian consumer law revolutionʼ (2010) 38 Australian Business Law Review 251 7. James Byrnes, ʻThe NCCP and unfair contract terms legislation : practical and compliance issues.ʼ AUSTRALIAN BANKING AND FINANCE LAW BULLETIN 25 (6) December 2009 / January 2010 : p. 89 8. H. H. Mason and P. A. Butler, ʻThe Trade Practices Act 1974, and the possible inconsistency therewith of certain state laws dealing with consumer protectionʼ (1975) 49 Australian Legal Journal