It also shows some other possible objectives for the firm. Sales revenue maximisation, for example, occurs when marginal revenue is equal to zero, as the next unit produced would carry a negative marginal revenue and hence reduce total revenue. The point where the volume of sales of the good are maximised subject to making at least normal profit is also shown (at the point where AR=AC). An Diagram Possible objectives of the firm I Profit maximisation may become
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).
Lower reserve requirements will result in more funds being available to loan out. This should, in turn, increase the rate of economic growth. Conversely, a higher reserve requirement will reduce the availability of funds and should slow economic growth. In this case, we need to increase our rate of economic growth in response to the recession, so I choose to lower the reserve requirement. The reason I would make this choice is to stimulate lending to businesses, reduce unemployment and increase household income so that the economy could then recover naturally.
The implied duty of fidelity protects business interests and imposes a obligation employee must not disclose any information or trade secrets of their employers business. Throughout the course of employment, an employer will obtain information, which may possibly be confidential information. If an employee’s position is highly ranked then there will be possibilities that the employer has acquired potential confidential business information that may be disclosed this type of situation will need to be addressed and employers will need protection. In Thomas v Farr plc. , the categories of information was sectioned out to address what type of information is not to be disclosed when the employment contract has ended.
The vendor will be function in effort to make a profit as is with all businesses. The problems can come when the vendor needs to increase profit and since the contracts are normally a fixed price, the only way for them to do so is to decrease expenses. This is a viable option as long as they meet the conditions specified in the contract (Bucki, 2012). When outsourcing to another company, your organization is now tied to the financial well-being of the vendor. The problem can arise when after contracting out the IT functions of the organization and paying the fees negotiated, the vendor goes bankrupt leaving the companies who have contracted to them without an IT resource (Bucki,
Since Mr. Murphy cannot spend his free time any way he wants, it should be compensated under FLSA regulations. Additionally, any time that Mr. Murphy is called to work during the on-call time requires pay (DoL,
An independent contractor has benefited as one who does a “job for a price, decides how the work will be done, usually hires others to do the work, and depends for their income not upon wages, but upon the difference between what they pay for goods, materials and labor and what they receive for the end result, that is upon profits.” “A contingent worker is one whose job with an employer is temporary, is sporadic, or differs in any way from the norm of full-time employment. As used by the EEOC, the term “contingent worker” includes those who are hired by an employer through a staffing firm, as well as temporary, seasonal, and part-time workers, and those considered to be independent contractors rather than employees”(Bennett-Alexander & Hartman, 2007). With that an employee of Cost Club will following the policies and procedures set for them. This includes the details of their job. The location they work, how many hours they work, what benefits are offered to them and any other factors that are related to employment.
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.
“For instance, the fall in the wage lowers people’s income and thereby reduces demand. That reduction may feed back to firms and reduce the demand for their goods, which might reduce the firms’ demand for workers” (Colander, The Limitation of Supply/Demand Analysis, 2010). “If these effects do occur, and are important enough to affect the result, they have to be added for the analysis to be complete. A complete analysis always includes the relevant feedback effects” (Colander, The Limitation of Supply/Demand Analysis,
The advantages to a sole proprietorship are, there is no startup cost, and you just simply start collecting money for exchange of services or goods. You set your own hours. You decide how much or how little you work. You also decide what contracts to enter. Disadvantages of a sole proprietorships are, you can’t transfer or sell the business.