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Words 1691

Pages 7

INTRODUCTION: As you work on each of the Tasks please make use of the various resources posted and updated within the Business Undergraduate Economics Learning Community

Task 1 Recorded Webinar

TASK 1: MARGINAL ANALYSIS

This Task centers on the competency of marginal analysis with two structured objectives. First is the requirement to describe the relationship between marginal revenue (MR) and marginal cost (MC) at the point of profit maximization. Second is the requirement to explain the concept of profit maximization. ACTIONS OF APPROACH: 1- Prior to turning in the Task, consider attending a Live Webinar on the Task. Students that attend are much more likely to pass the Task. You can always find an updated schedule of Live Webinars in the Community Pages (link at the top of this document). 2- This essay should be relatively short (1-3 pages) and can be written entirely from the concepts discussed within the McConnell e-text. In preparing for this Task you should read Chapters 7-11 of the McConnell e-text, with specific concentration on the information in Chapters 7 & 8.

*Chapter 7 "Business and the Costs of Production" *Chapter 8 "Pure Competition in the Short Run" Chapter 9 "Pure Competition in the Long Run" Chapter 10 "Pure Monopoly" Chapter 11 "Monopolistic Competition and Oligopoly"

3- Formulate your responses to this Task in accordance with an “outline” format. More specifically, when writing your paper – list the Task Element and structure your response immediately thereafter. For each Task Element (or sub-element) create a new heading clearly identifying the Task prompt and ensure that your entire response is contained in the paragraph(s) that immediately follow. Example: Element A, answer. Element B, answer. Do not include the actual question with the Task prompt. IMPORTANT: Including the Task question along with the Task prompt…...

...EGT1: Task 1 Total revenue is what a firm profits all together on the sales of a product or service. It is the sum of all the money spent by the consumers on that product or service. Total cost is what it cost the firm to make a product or deliver a service. Total cost includes the purchasing of raw materials, labor, production, transportation, and any other cost incurred by the firm. To gain profit maximization, you have to take total revenue and minus total cost. The point at which the difference is the highest would be the profit maximum. Marginal revenue is the additional profit or revenue that a firm makes by selling one more product or service. In a monopolistic competitive market, the market determines the price of the products or services being sold. Marginal cost is the cost to a firm to produce one more product. It is calculated by taking the total cost of the last product made and subtracting the total cost of the product before that. In the graph, it costs Company A $30 to make one product and $50 to make two products. The marginal cost is $50 minus $30; which is $20. It goes up $10 for every additional product. To figure out marginal revenue, take the total revenue minus the total cost for each product produced. The difference in profit from one unit to the other is the marginal revenue. Marginal revenue increases from making one product up to eight. When the production of a product reaches seven and eight, the profit is at a......

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...EGT1 Task 1 Student ID: A1. To achieve profit maximization, we must understand that profit is equal to total revenue (TR) less total cost (TC). Profit maximization occurs once total revenue exceeds total cost. A2. Marginal revenue is the change in total revenue from the sale of one additional unit. Marginal cost is the change in total cost as output changes by one unit. Profit maximization occurs when marginal revenue and marginal cost are equal. B. Marginal revenue is calculated by taking the change in total revenue / the change in quantity. B1. In the given scenario, one must calculate how much Company A made in marginal revenue from each widget by dividing the total revenue received by the quantity of widgets sold. Based on the different output levels in the given scenario, one can determine that marginal revenue will steadily decrease. C. Marginal cost is calculated by taking the change in total cost / the change in quantity. C1. By dividing the total cost of each widget sold by the quantity of widgets sold in the given scenario, one can determine that marginal cost will steadily increase. D. In the given scenario, profit maximization occurs at the quantity of eight. This is the point where a variation in total revenue and total cost is $540. This is also the point where marginal revenue and marginal cost are equal. E. If marginal revenue is greater than marginal cost, it would result in a profit and larger......

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...EGTI Task 1 Marginal Analysis In order for any business to be successful they would need to know how to make the most profit for the goods they are producing and selling. In this paper I am going to explain some of the key terms that companies need to keep in mind when operating their business. First, we will start with marginal revenue, which is defined simply as the extra revenue that is made for each additional unit of a product that is sold. This is directly related to marginal cost, which is what it costs the company to make that additional unit of product. Next there is total cost and total revenue. Total cost is what the company spends to produce a certain quantity of its product. This includes the cost of all the materials, labor, production, etc. Total revenue is defined as the total amount of money received from producing and selling that given quantity of a product. Total revenue is not to be confused with profit however. Profit comes from subtracting the total cost of units produced from the total revenue made. Simply put: Profit = Total revenue – total cost. In order to determine profit maximization using total revenue to total cost Company A would need to find the optimal output level. For each widget Company A produces both the total cost and total revenue increase. However, if total cost ever exceeds the total revenue the company will begin to lose money. The chart below shows the point at which Company A would reach their profit maximization using...

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...Economics and Global Business Communications Name Course Instructor Date Competency 309.1.1: Marginal Analysis A.1. Profit maximization is the desire and target of all trading companies that operate in various industries, in different markets (Taylor & Weerapana, 2012). They must first of all produce products for sale to achieve the same. This production results into various financial costs that have to be overcome with the revenue from the sales. The difference between the total revenue and total costs becomes the profit to the firm. The total revenue to total cost approach is, therefore, concerned with maximizing the difference between total revenue and total cost. 2. Marginal revenues to marginal cost approach are meant to supplement the total revue to total cost approach (Taylor, 2008; Landsburg, 2011). In this perspective, marginal profit is arrived at after subtracting marginal cost from the marginal revenue of a firm. In the event that the marginal revenue is higher than the marginal cost at a given level of output, it follows that additional quantities should be produced. B. 1. Marginal revenue is known to be the revenue that accrues to the firm after having produced one extra unit on top of what had been produced initially. It is got from dividing the total revenue obtained by the firm from trading activities with the number of units sold. Marginal revenue increases when the...

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...EGT1: Task 1 Profit maximization is derived from two sources that counteract one another. This dynamic can best be described as total revenue (TR) vs. total cost (TC). Total revenue is quantified as a firm’s total profit intake from sales of a product or service delivered. This is total amount of revenue that was derived from consumer spending. Total cost, however, includes all the purchases of raw materials, labor, production, transportation, distribution or any other cost incurred by this particular firm for this particular product or service. In order to calculate profitization, you must subtract the total cost from the total revenue. The point at which maximum profitization would occur would be when the difference between these two numbers is at it’s positive peak. To define marginal revenue (MR), we must first define marginal cost. Marginal cost (MC) is that additional cost associated with producing this additional product or service to the consumers. It can be calculated by dividing the change in cost by the change in unit production. After calculating marginal cost, if the cost is lower than the current price of the item, there is no need to lower the price of the item to sell more units. In the given illustration, Company A spends $30 to produce one product and $50 to produce two. The marginal cost, in this example, would be $20. It also illustrates that this cost increases $10 for every new product. Marginal revenue is defined as the additional......

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...EGT1 – Task 1 6/5/14 In this essay I will define terms of economics and explain their relationships. How a profit maximizing firm determines the level of output & the reaction to the level of marginal revenue will also be explained. Profit maximization is the process which determines the price & output level which the most profit will be made. The total revenue – total cost approach is based on the profit equals the revenue minus the total cost. The total revenue is the sum of the company’s sales of the item in question where the total cost is the cost the company pays to produce the product. Marginal Revenue – Marginal cost should also be considered. Marginal revenue is defined as the extra revenue made when one additional product is sold. Where total cost is the cost paid to produce the product, the marginal cost is the cost paid to produce one more unit. As stated above the marginal revenue is the extra revenue made when one additional product is sold. The calculation used to determine this is total revenue divided by total quantity sold. In the scenario provided, the marginal revenue consistently decreases when more are sold, as you can see in the table & graph provided below. Also stated above marginal cost is the cost paid to produce one more unit of product. The calculation used to determine this is total cost divided by total output. In the scenario provided, the marginal cost increases when more are produced as you can see in the table...

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...Profit is equal to Marginal Revenue less the Marginal Cost. Profit maximization is the point where Marginal Revenue is equal to Marginal Cost. In this method, the company compares the amounts that each additional unit of output would add to total revenue and total cost. B1. To calculate Marginal Revenue, you get the difference in total revenue after a unit is produced and divide it by the change in quantity. In the given scenario, the quantity change is always 1 and the Marginal Revenue only increases when the first unit is produced. The only increase is when 1 unit is produced which yields the Marginal Revenue of 150. The Marginal Revenue decreases by 10 when 2 units are produced all the way to when 15 units are produced. So, when 2 units are produced, the Marginal Revenue is 140, it’s 130 when the 3 units are produced, it’s 120 when the 4 units are produced, and so on. C1. To calculate Marginal Cost, you get the difference in total cost after a unit is produced and divide it by the change in quantity. When 1 unit is produced, the Marginal Cost is 20 and when 2 units are produced, the Marginal Cost stays the same. When 3 units are produced, the Marginal Cost increases to 30 and keeps increasing by 10 all the way to the 15th unit. D. Using the chart and calculating the profits, we can see that profit is 540 when 7 and 8 units are produced. After calculating the Marginal Cost and Marginal Revenue, we can see that when 8 units are produced, the Marginal Cost......

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...EGT1 Task 2: Elasticity of demand, also known as price elasticity of demand is defined as: measuring the responsiveness of demand to changes in price for a particular good. If the price elasticity of demand is equal to 0, demand is perfectly inelastic. Values between zero and one indicate that demand is inelastic. When price elasticity of demand equals one, demand is unit elastic. Finally, if the value is greater than one, demand is perfectly elastic. (Investopedia US, A Division of ValueClick, Inc., 2013) A perfectly elastic demand curve is horizontal and a vertical curve represents a perfectly inelastic demand curve. Elastic demand is a large change in quantity purchased for a given price change. The coefficient ends up as greater then one because the numerator is larger then the denominator in the equation. With inelastic demand there is a small change in quantity purchased for a given price change. The coefficient ends up less than one because the numerator is smaller then the denominator in the equation. Unit elastic is the quantity demanded and own price change the same percentage. The coefficient ends up being equal to one because the numerator and denominator are the same. Cross price elasticity of demand can be defined as measuring the percentage change in demand for a specific good caused by a percent change in the price of another good. There are two kinds of goods, complements and substitutes. Complement goods are goods that are used with one another......

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...EGT Task 1 A. Demand of a unit is inelastic when the price is one and the increase to price makes the revenue higher. Elastic demand occurs when the price is higher than one and with the fluctuation of prices increase and decreases total revenue will incline or decline. A good example would be when the demand measurement is changed as when a company lowers the price products to boosts or increase sales. B. The cross elasticity of demand measures how sensitive consumer purchases of one product (say, X) are to a change in the price of some other product (say, Y). We calculate the coefficient of cross elasticity of demand Exy just as we do the coefficient of simple price elasticity, except that Cross-price elasticity is a measure of how sensitive consumer purchases of one product are to a change in the price of some other product .Substitute goods are goods that can be used in the place of other goods, like bread and bagels. Complementary goods are goods that are used along with other goods, like coffee and creamer. In other words, they “complement” each other. 3. Income elasticity measures how much a change in a consumer’s income will affect their purchasing habits of normal goods, such as automobiles, groceries, and houses, as well as inferior goods, such as potted meat and bus tickets. Goods whose demand rises when incomes rise but decreases when incomes fall are normal goods. Goods whose demand rises when incomes decrease but decreases when incomes rise are...

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...EGT1 – Task 2 Elasticity of Demand: Price elasticity of demand is the method used to quantify how reactive consumers will be to changing prices. It is calculated by dividing the percentage change in quantity of an item demanded by the percentage change in the item price. Elastic demand is when the percentage price increases results in a greater percentage decrease in demand or the reverse, when the percentage price decreases and results in a greater percentage increase in demand. Conversely, inelastic demand is when the percentage price increase results in a lesser percentage decrease in demand, or the percentage price decrease results in a lesser percentage increase in demand. On the other hand, unit elasticity is when the percentage increase or decrease in price results in an equal percentage decrease or increase in demand. Cross Price Elasticity: Cross price elasticity quantifies how reactive people are when purchasing one item, based on price changes of another item. It is calculated dividing the percentage change of the quantity demanded of the first item by the percentage change in the second item’s price. One type of cross price elasticity relates to substitute goods where the consumer has the option to choose between many similar goods. In this situation the consumer will likely substitute one good for the lower priced similar product. Substitute goods are established when the cross price elasticity calculation returns a positive......

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...WGU EGT1 Complete Course Task 1 - 4 IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://www.hwnerd.com/WGU-EGT1-Complete-Course-Task-1-4-1816.htm?categoryId=-1 If You Face Any Problem E- Mail Us At Contact.Hwnerd@Gmail.Com Task 1 Profit maximization involves a company using a long or short ran procedure that determines the cost and productivity level, which would gain the maximum proceeds. Profit would be equivalent to the total revenue (TR) minus the total cost (TC). Where the difference is the highest is where profit maximization is. The profit calculation for marginal revenue (MR) to marginal cost (MC) is different. The company will compare the marginal revenue they receive from selling a single widget to the marginal cost of producing another widget, and how much cost it adds to the total revenue and total costs. Task 2 Elasticity of demand can be measured from the change in percentage of quantity demanded compared to the change in percentage of a goods price. If the quantity demanded is identical as the percentage to change in price, the end result is a ratio of 1. This will be identified as unit elastic demand. You will observe this as a curve that is diagonal. TASK 3 The antitrust laws were put together by the federal government as a way to make businesses compete with each other fairly. The laws prevent fixed pricing; promote ethical pricing as well as preventing monopolies among many......

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...EGT1 Task 1 Marginal Analysis Student Name Western Governors University Student ID: The primary focus of this paper is to demonstrate the concepts of marginal revenue and marginal cost, how the two are related to each other and how they are used by a company in profit maximization. By factoring, analyzing and comparing the various data on revenue and cost, a company can use a marginal analysis to determine the best direction to maximize profits. A marginal analysis is the “comparisons of marginal benefits and marginal costs, usually for decision making” (McConnell, 2011, p. 6). A. There are two methods to describe profit maximization. Further details of both methods and how each are used to determine profit maximization are as followed: 1. One method of understanding profit maximization is by using the relationship of total revenue and total cost. Total revenue is the total income that a company receives from a product or service. The price multiplied by the quantity of the product or service equates to the total revenue. Total cost is the total expense or cost to a company to produce a product or provide a service. Profit is determined by subtracting the total cost from the total revenue. Initially, as production or quantity increases, profit increases as well. There is a point, however, where the profit will maximize and then begin to diminish as the unit quantity increases. This point is where the greatest profit is realized in relation to the total revenue...

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...WGU EGT1 Complete Course Task 1 - 4 IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://www.hwnerd.com/WGU-EGT1-Complete-Course-Task-1-4-1816.htm?categoryId=-1 If You Face Any Problem E- Mail Us At Contact.Hwnerd@Gmail.Com Task 1 Profit maximization involves a company using a long or short ran procedure that determines the cost and productivity level, which would gain the maximum proceeds. Profit would be equivalent to the total revenue (TR) minus the total cost (TC). Where the difference is the highest is where profit maximization is. The profit calculation for marginal revenue (MR) to marginal cost (MC) is different. The company will compare the marginal revenue they receive from selling a single widget to the marginal cost of producing another widget, and how much cost it adds to the total revenue and total costs. Task 2 Elasticity of demand can be measured from the change in percentage of quantity demanded compared to the change in percentage of a goods price. If the quantity demanded is identical as the percentage to change in price, the end result is a ratio of 1. This will be identified as unit elastic demand. You will observe this as a curve that is diagonal. TASK 3 The antitrust laws were put together by the federal government as a way to make businesses compete with each other fairly. The laws prevent fixed pricing; promote ethical pricing as well as preventing monopolies among many......

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...as they consider how a potential change will impact markets when consumers adjust their purchasing behaviors. Task: A. Discuss elasticity of demand as it pertains to elastic, unit, and inelastic demand. B. Discuss cross price elasticity as it pertains to substitute goods and complementary goods. C. Discuss income elasticity as it pertains to inferior goods and to normal goods (sometimes also called superior goods). D. Use an example to discuss why demand tends to be relatively elastic in a situation where “Availability of Substitutes” exists. E. Discuss the “Proportion of Income Devoted to a Good” concept by contrasting two products purchased. 1. Address, in your discussion, specific examples of how the same percentage change in the price of both goods affects the percentage change in the quantity demanded for each of the two goods. F. Contrast how a person would initially respond to a relatively large increase in the price of a product in the short run as opposed to how that same person might react to that same price increase over a longer time horizon (i.e., the long run), using the “Consumer's Time Horizon” concept. G. Identify by price range the areas on the demand curve where demand is elastic, inelastic, and unit elastic using the attached “Graphs for Elasticity of Demand, Total Revenue.” 1. Explain the corresponding impact on total revenue for each of the three price ranges indentified in part G....

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...WGU EGT1 Complete Course Task 1 - 4 http://www.homeworkminutes.com/answer/view/40124 TASK 1 Profit maximization involves a company using a long or short ran procedure that determines the cost and productivity level, which would gain the maximum proceeds. Profit would be equivalent to the total revenue (TR) minus the total cost (TC). Where the difference is the highest is where profit maximization is. The profit calculation for marginal revenue (MR) to marginal cost (MC) is different. The company will compare the marginal revenue they receive from selling a single widget to the marginal cost of producing another widget, and how much cost it adds to the total revenue and total costs. Task 2 Elasticity of demand can be measured from the change in percentage of quantity demanded compared to the change in percentage of a goods price. If the quantity demanded is identical as the percentage to change in price, the end result is a ratio of 1. This will be identified as unit elastic demand. You will observe this as a curve that is diagonal. TASK 3 The antitrust laws were put together by the federal government as a way to make businesses compete with each other fairly. The laws prevent fixed pricing; promote ethical pricing as well as preventing monopolies among many other things. There are four major pieces of legislation that make up these antitrust laws and they are as follows: Task 4 The most obvious...

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