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Microeconomics
Economic costs are both the direct costs and the opportunity costs of a decision. There are a number of types of costs that are discussed in economics disciplines. These can be direct and indirect costs, but more common costs are things like marginal costs. These are the added cost associated with an increase in output. Microeconomics often focuses on things like marginal cost, and uses the economic cost concept to analyze individual purchase decisions. For example, we can deduce that while a degree might cost $40,000, it also carries with it an opportunity cost related to how much could have been earned flipping burgers during those four years. The economic cost of the degree therefore might be closer to $50,000. The concept of economic costs is often applied to production situations, where firms must make decisions about pricing an production levels based on analysis of the different types of economic costs.
There are other economic costs as well. Firms are often concerned with average cost, along with marginal cost, because that sort of information...
Thus fixed, variable, average and marginal costs are all part of economic discourse.
These different costs are important to understanding how businesses make their decisions with respect to pricing and production. There is a relationship, in that as a general rule the production level will decrease if the costs increase. This is because there will be a lesser contribution to fixed costs, something that affects profitability. To overcome this, the firm must be able to raise its prices. In many industries, prices are driven by the dynamics of the market and therefore it is not easy to raise prices -- the rigidity relates to the economic decision-making process.
2. If a firm is operating at a point where the average total cost is equal to the marginal cost then the firm is not making a profit. The firm might decide to build a bigger plant however, if it believes that a bigger plant might lower its average total cost. Often, there is an assumption that economies of scale can deliver lower average total costs for companies. This…
The type of configuration that would create such an industry is: having a large number of competitors in the market (with a variety of brands). ("Woolies denies existence of beer price," 2011) Hypothetically, if both firms go through with this strategy and succeeded (i.e. they drive out the remaining competition in retail), what would be a long run concern for at least one of the two firms? (Note, this is
Economics Define economics Economics is defined as the study of how society allocates limited resources and goods (Encyclopedia Britannica, 2009). Resources include inputs such as labor, capital, and land and are used to produce goods. Goods include products such as food and clothing, as well as services such as those of barbers, doctors, and firefighters. Often goods and resources are deemed scarce because of society's demand for them vs. their availability (Stapleford,
We analyze the economy's productivity by calculating the Gross National Product, which is "the market value of the sum of all the goods and services produced in the economy." The economy's productivity should have a constantly growing figure in order to ensure the fact that that country is currently developing at its fullest potential. The fiscal policy is the "means by which a government adjusts its levels of spending in
Microeconomics Industry description The modern day economic climate is extremely dynamic and challenging, revealing a context in which the economic agents are presented with both opportunities as well as challenges. One specific means in which they choose to respond to the challenges and seize the opportunities is represented by them joining forces through mergers and acquisitions. A particular merger of specific interest in 2011 is represented by the merger between Irving Oil
Economics Issues in Non-Public Schools This paper is a literature review of economic issues in non-public schools and it will mainly use information obtained from nine sources of economic literatures so highlighted in the work cited section. To begin with, this section will look at an overview of the economic subject from a general perspective, followed also by an overview of the non-public educational sector in general; the purpose of this
Monopolies and Trusts: Appropriate Areas for Government Intervention? Capitalism is the economic system that has dominated the United States virtually since the day of its independence. A social and economic system based on the recognition of individual rights; capitalism demands that owners' rights to control, enjoy, and dispose of their own property must be respected. In a capitalist system, the purpose of government is to protect individual economic rights, and to make