Business costs Assignment Example | Topics and Well Written Essays - 1000 words

Business prices - Assignment ExampleFor example, a blind drunk always prefer to fix any unit of tabuput whos per unit marginal tax income exceeds the marginal cost of the unit. By doing so, the besotted would gain more revenue by selling that unit. On the other hand, if the marginal cost of a unit of output is more than its marginal revenue in that case, the firm avoids producing that unit. If the firm produces such unit, it would incur loss rather than profit on the unit. 2- What do you understand by the term economies of subdue? Reductions in per unit cost resulting from increase in foodstuff size and increase in firm are called as economies of scale. Any unit cost reduction that occurs when a firm increase its achievement base or aggregately, the merchandise in which that firm is producing its units, increase. Over that period of time globally as well as locally, the firms and the markets are increasing. This increase in both is mostly contributed by the latest fashion of technology, which are mostly used nowadays in the process of production. For example, previously much work was carried out manually as a result, a sufficient amount of resources were consumed. Thanks to machinsation and computerisation that have sufficiently added in the process of economies of scale. ... enue- totally equalling with the total costs- or in total units of production, the cost of produced units offsets the revenue obtained by the trade of units. Some reasons may justify a come with keep producing units even it is making loss. First, the loss, occurred by the break-even dot or near to that point, most of time doesnt last for a considerable period of time. The company may be experiencing a seasonal variation in the demand of a particular unit. As soon as that period of seasonal variation in demand ends, the company again observes profits- revenue exceeding costs. 4- What market power may large firms enjoy? How and why may a establishment seek to limit this? Mark et power is associated with the behaviour of a firm and the way firms affect private-enterprise(a) conditions and prices in a market (Bourdet, 1991). The way a firm adopts its supply of goods and services production mechanics and its aggregate strategy towards its prices determines its market power. For example, if a firm has 70 percent market shares in the deal of a particular commodity. Under this condition, it would not be incorrect to say that the firm has sufficient market power to affect and control the prices of that commodity. A government via legislation can restrict to limit the market power of the firm. By enacting a particular legislation and implementing it, the government would become in a congeal to limit the firms market power. The main reason for limiting the market power of the firm is to allow the competitive market conditions. The competitive market conditions benefit producers and the consumers as it would protect consumers who would pay high costs if the fi rm limit the required level of commodities in market. 5- Consumer gain as much from scurvy business as from large ones. Analyse