Essays on Average Total Cost

According to the modern market trend, the microwavable foods offered by brands such as Healthy Choice and Lean Cuisine have become a convenient option and an easy diet solution for busy people. These microwavable foods are easy to prepare and consume for the people having hectic lives. Thus, there are two growing competitors for this industry of low-calorie frozen, microwavable food. These two competitors have several common factors in their products such as product types and variety, nutritional level and price margin. However, according to the recent financials, Lean Cuisine and Healthy Choice, it had faced a significant drop ...

Out of the many options that today’s generation want easy is the food options. And this easy option is provided by frozen meals of the microwave like Lean Cuisine and Healthy Choice. They also offer favorable solutions of diet for current generation people who are busy. As a result of the growing demand, the competition is also growing and there are two major competitors in the low-calorie, microwavable frozen segment of food industry. There are a number of common factors between both the Companies like the type of product, the value of nutrition, and the price. Another similarity ...

Assignment 2: Operations Decision

Assignment 2: Operations Decision IntroductionCurrently, the options for microwave foods with low calorie have widened in the market. As the income of the people has gone up, the consumers can now have higher affordability towards an easy way of living; thus allowing for a change in the traditional rigorous ways of cooking used in yesteryears. Microwaves have now somewhat replaced the cooking methods used traditionally. As the popularity of microwaves has increased, the use of food items related to the same has also enhanced. Since there is such wide variety available for products, there can be an easy target ...

Barriers to entry refer to the aspects in an industry that make it difficult for new firms to enter into the industry and make profits. Some of the examples of barriers to entry include patents, brands, regulation, economies of scale and control of scarce resources. Non-price barriers refer to those aspects that are not price-related. McDonald’s has erected some barriers to entry to discourage other new firms from entering the market for their products. Use of its distribution networks is an example of how McDonald’s has erected a non-price barrier to entry. The company has taken several ...

Introduction

The objective of any firm is to maximise profits and increase shareholders’ wealth. This objective can only be attained if the market structure is favourable for the operations of the firm. The market for low-calorie microwavable food has changed from perfect to imperfect competition. This paper discusses the effectiveness of the new market structure to the operations of the company. It also assesses the profitability of the firm based on the cost functions and the demand function from assignment. In addition, the paper explores was in which the company can improve its profitability as well as the circumstances under ...

Economics experiment

In this research paper, we will study the behavior of the two firms operating under oligopoly market. In other words, our research will be based on the Game Theory so as to examine the strategic behavior of the firms in an oligopoly market which we call Prisoner’s Dilemma. This economic research will help us in understanding the behavior of the firms competing under oligopoly conditions. Question: Since we all know that oligopoly market structure operates with a small number of sellers who are highly interdependent on their competitor’s pricing policy and most importantly each of the firms ...

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A firm investing in production factors uses them to produce competitive products. Monetary value of the use of economic resources of the company for the production and sale of products or services is called the cost of production or cost of services . Cost of products (services) is a set of costs on a production and marketing costs associated with the provision of services . In cost reflects all costs incurred by labor and materials costs in the form of raw , material , fuel and energy resources , depreciation of fixed assets, wages. Cost ...

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Problem 1 Opportunity Cost - Define the term “Opportunity Cost” Opportunity cost is the value of the foregone mutually exclusive alternatives. When choice are to be made between several mutually exclusive alternatives in terms of decision making, opportunity cost is the value of alternative that is forgone due to selection of some other alternatives. Generally, opportunity cost is the value of next best alternative that can be achieved with same input. For example: George had $2 in his pocket which is enough to buy either a cup of tea or a cup of coffee. Among ...

Question 1

Economists may apply some economical elements, as a way of thinking, when approaching the problem of the alcohol abuse. These element of economic way of thinking include, application of ceteris paribus, assumption to simplify, the coherent public responding to incentives, and marginal thinking. During their analysis, economists apply assumption to make simplify complex concepts in order to be able to be more attentive on the basic elements that matters. The simplified assumption therefore, must critically analyze to determine their suitability (Schotter, 2009). On the other hand, the economists are interested on two main variables. Alcohol is considered as one ...

Cost & Profit

1. Give a brief summary of economic costs (i.e. how are they different from accounting costs). In the short-run, why might a firm still operate even when there is a loss.

Accounting cost is the explicit monetary value of resources, which have been used in performing a particular activity. It is the historical cost, which is usually reflected in the accounting statements. Accounting costs are very useful in evaluating past performance of a company and in comparing companies within an industry. However, accounting costs are not sufficient for strategic decision-making, since they do not take into consideration the cost of the alternative solutions, which ...

Question 1:

(a) Suppose the income elasticity of demand for furniture is 3 and the income elasticity for doctors' services is 0.3. Compare the impact on furniture and doctors services of a recession that reduced consumer incomes by 10 per cent. (2 marks)

Change in income = 10% = 0.1

Income elasticity of demand = change in quantity demanded/ change in income

Therefore: change in quantity demanded = Income elasticity of demand × change in income

Impact of recession on furniture:

Change in quantity demanded = 3 × 0.1= 0.3 = 30%

A change of 10% in consumer income will result in a 30% change in quantity demanded of furniture.

Impact of ...

Unit:

Solution to the Question

When fixed price is 1,000,000

Number of workers= 50,000

Workers daily wage=80

Other variable cost= 400,000

Therefore Total variable cost= (50000*80) + 400, 000

=4,400,000

Units of Output per day=200,000

Therefore, Average Variable Cost=4,400,000 / 200,000

=22

Average total cost= (4,400,000+1,000,000) /200,000

=27

Work productivity= 200, 000 / 50,000

=4 When the fixed price is at 1,000,000, the total cost per unit is $27. Considering the firm sells the output at $25 per unit, and then at this fixed cost, the firm is making a loss of $2 per unit.

When the fixed cost is at 3,000,000

Total variable cost=4,400,000 (calculated in part a)

Average variable cost =22 (calculated in part a)

Average total cost= (4,400,000+3,000,000) / 200,000

=37

Work productivity=4 (calculated in part a)

Advise: When the fixed cost is at $ ...