Lastly organizations must all seek the greatest profits meaning nothing else but profits. When these conditions are meet which isn’t often, organizations can supply goods following their own self-interests in a predictable manner to the market. Suppliers utilize the demand curve to determine the amount of productivity and the right cost for the market. The requirement that all the firms are large ensures no organizations will be able to gain more than another. These types of conditions keep firms from monopolizing the market.
A monopoly is where you can set prices almost everywhere you want, and there is no other competition. This is referred to as predatory pricing, where companies charge a price lower than production costs. These companies believe their competitors can’t afford the loses. Cable companies don’t worry about competition due to the protection they enjoy from the government. The cable companies get away with this by claiming they do not have competition, cities award them the contract by providing coverage, even though they may not have the lowest price.
Profit maximisation is assumed to be the objective of a firm, however there are other objectives that firms have, these include: revenue maximisation and sales maximisation. A firm aiming to maximise profit will aim to operate at output level Q, where Marginal Revenue (MR) is equal to Marginal Cost (MC). A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, sale prices, and output levels as a way of reaching its profit goal. There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method.
Monopoly is where only one company is providing a good and or service. Businesses may maximize profit in each market type by agreeing upon a lay down price. Perhaps businesses cannot agree upon a set price then the price is going to be above marginal cost. If the company is in competition with other companies in the same market, making decisions about prices, how they advertise, output, etc, can influence the profits of every, if not all companies in the same market. This is where management gets involved to ensure the company that their strategic way of thinking and planning can and will allow the company to gain
So to be able to have a productive and successful business, business owners may want to look into maximizing their profits by way of the profit maximization concept. Profit maximization is when a company comes to a conclusion on the price and output level that will turn the maximum profit by using this particular process (Wikipedia). Granted there are many different approaches to this problem; however in this essay we will be considering the TR to TC method and the MR MC method. Tiffany C Wright expressed that the total revenue to total cost method is dependent on the fact that profit equals revenue minus cost. Total revenue equals price time’s quantity.
The contracting of the entire department or even a single task to an outside vendor translates to the turning over the management and control of the function to another company. Another reason to not outsource, is to avoid the additional possible security issues that comes with turning your information over to an outside vendor (Bucki, 2012). Risks Associated With Outsourcing When outsourcing to another company there are various risks that come with this process. One risk can come in the form of quality issues. The vendor will be function in effort to make a profit as is with all businesses.
Company G has prided itself on cultivating relationships with it's suppliers built on honesty, confidence, and allegiance in order to facilitate profits for both parties. However, as popularity may grow for the product so too may the market and suppliers might consider increasing costs, in which case a fixed contract would be discussed. Threat from Substitutes – If the Little Wonder does prosper their may be threats from substitutes from larger companies that are able to produce a similar product on an increased scale thereby reducing it's price and making it difficult for Company G to compete. SWOT Analysis A SWOT analysis has been done for Company G and the outcome is clearly positive. The details of that evaluation: STRENGTHS Dedication from management, employees, and suppliers 1.
Finally, we have seen how these incentives affect different types of organizations. We have seen cases where companies move for reasons that other may consider small like consultation, or travel. While others move because of additional material benefits, such as lower labor, and shipping costs. Because of the importance of this decision an organization should study the different types of incentives and chose the most beneficial to their
In determining which goods to import from which country and which goods to export, I encountered some of the advantages and some limitations of the international trade. According to the theory of comparative advantage, a country should specialize in the production and export of commodities that it can produce at a lower opportunity cost than other countries while it should import commodities that are produced at a lower opportunity cost than other countries. Limitations such as imposing a quota or tariff can raise the price of products and lead to a loss in consumer surplus or cause retaliation from the country therefore reducing the goods a country is able to export. There are factors that influence the foreign exchange rate which also has an impact on a country’s importing and exporting. Regardless of these things, international trade is important to a countries
There are governments that totally control their economy and do not do business with other countries. There are governments that rule monetary policy and tax business, but do not become concerned in the markets otherwise. Similar to mixed economies, the positions of a government in the configuration of an economy is crucial to understand in order to understand the economics of the country. Concepts of Macroeconomics and Understanding Business or economic cycles focus on the variations, both anticipated and unexpected, within an economy. Variations in business cycles are able to be seen as short-term and long-term progression developments and they could shift.