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ECO Paper - Business owners, managers, and aspiring entrepreneurs

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Question;Business owners, managers, and aspiring entrepreneurs need;to know the best form of business organization to select based on various;considerations, including taxes, liability, capital contributions, sharing of;profits and losses, management and control, and survivorship.;Scenario;Company A is a producer of widgets in a monopolistically;competitive market structure. It is projected that as more widgets are sold;Company A must offer a discount on each one to ensure adequate demand. Due to;limited supplies and the cost of equipment maintenance the cost will rise as;more widgets are produced.;The tables below provide data on the revenue and cost at;different output levels for the year.;Quantity/TR/TC;0 $0.00 $10.00;1 $150.00 $30.00;2 $290.00 $50.00;3 $420.00 $80.00;4 $540.00 $120.00;5 $650.00 $170.00;6 $750.00 $230.00;7 $840.00 $300.00;8 $920.00 $380.00;9 $990.00 $470.00;10 $1,050.00 $570.00;11 $1,100.00 $680.00;12 $1,140.00 $800.00;13 $1,170.00 $930.00;14 $1,190.00 $1,070.00;15 $1,200.00 $1,220.00;Task;Write an essay (suggested length of 1?3 pages) that explains;the relationship between marginal revenue and marginal cost, and the importance;of these concepts for profit maximization in which you do the following;A. Explain profit maximization from the following;approaches;1. Total revenue to total cost;2. Marginal revenue to marginal cost;?Total revenue is figured by multiplying price times;quantity.? The total cost can is;B. Explain the calculation used to determine marginal;revenue.;1. Discuss how marginal revenue increases, decreases, or;remains constant in the given scenario.;C. Explain the calculation used to determine marginal cost.;1. Discuss how marginal cost increases, decreases, or;remains constant in the given scenario.;D. Explain where profit-maximization occurs for Company A;using the chart provided in the given scenario.;E. Explain what action should be taken in terms of adjusting;output if it is determined that marginal revenue is greater than marginal cost.;F. Explain what action should be taken in terms of adjusting;output if it is determined that marginal cost is greater than marginal revenue.

 

Paper#56513 | Written in 18-Jul-2015

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