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Lecture Notes I. Demand
Determines Marginal Revenue.
II. Maximizing Profit Using Marginal Analysis A. Selling quantity Q will maximize profit. B. At quantities below optimum point Q, MR exceeds MC and increasing quantity sold will increase profit. C. At quantities above point Q, MC exceeds MR and an increase in quantity sold will decrease total profit. D. Maximum profit results when MR = MC E. To find total revenue (TR) draw a perpendicular line from the intersection of MR and MC to the quantity axis. Then extend the line up to the demand curve and over to the y-axis. The resulting rectangle is P x Q which equals total revenue. F. To find TC draw a line from the intersection of the perpendicular and ATC to the y-axis. The resulting rectangle is ATC x Q which is total costs. G. The resulting top rectangle is TR-TC. It is total profit.
At high prices, demand is inelastic, lowering price At medium prices, unitary elasticity means no
change total revenue as marginal revenue is negative.
III. Maximizing Profit with Total Analysis of Revenue & Cost
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Supplemental Political Economy Stuff
Many Seek an Advantage and Excess Profit
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IV. Minimizing a
Short- run Loss Versus a Short- run Close
Down
B. TR2 is paying all variable costs and making some C. TR3 is not covering all variable costs and not
Econ Concepts Video in in 60 Seconds,The Shut Down Rule
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V Economies and
Diseconomies of Scale Affect Profit.
B. Flexible production lines, designed by the Japanese and being used by companies such as and Profit A. Long-run average total costs are the horizontal summation of ever larger short-run average total costs. B. Sustainable growth of the U.S and Incremental Capital Output Rate
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US adjusted to maximize profit by becoming
The Economist Magazine 5/4/13
Source: @WSJ; Read
full article |
C. Proof That Managing for the Long-term Increases Profit
D. Can Labor's Share Return to the 20th Century Normal?
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VII.
Predicting profit with break-even analysis
A. Darin Jones has decided to open a
fully automated car wash with Linda Smith, a friend
from college. Speedy Car Wash would be fully B. Total Profit = Total Revenue - Total Costs D. Financial Accounting For Owners, Managers, and Administrators |
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The Dark Side of
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Largest Advanced Manufacturing Firms by Revenue
SOURCE: Compustat.
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These have got to be related?
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Last Chapter | Part II Product and Factor Markets |
Chapter 22 Class Discussion Questions | Table of Contents |
Chapter 22 Homework Questions | Economics Internet Library |