Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Define Profit maximisation theory?
Profit maximisation theory defines that firms (corporations orcompanies) will establish factories where they see potential to achieve the highest total profit. Company will select a location based upon comparative benefit (where product can be produced the cheapest). The theory draws from characteristics of the location site:labour costs, land price, transportation costs and access, worker unions, environmental restrictions, population etc. Company will then elect the best location for the factory to maximise profits. This is anathema to the idea of social responsibility since firms will place their factory to achieve profit maximisation. They are nonchalant tofair wage policies, environment conservation and exploit the country. The only objective is to earn more profits. In economics, profit maximisation is the process by that a firm concludes the price and output level which returns the greatest profit. There are many approaches to this problem. The total revenue-total cost method depends on the fact that profit equals revenue minus cost. Equating marginal cost and marginal revenue is a better and convenient method for arriving at profit maximising output. It allows firms to check whether they are actually maximising profits at a given level of output by comparing extra revenues and costs produced by the production of an extra unit of output. If this cost of producing an extra unit is less than the addition it makes to total revenue, firm should expand as it would increase total profit. This expansion should continue till MC and MR are equal. Profitsare maximised when this equality is achieved provided marginal cost at this level of output envelops the average cost of the firm. Just in the case MC turns out to be higher than marginal revenue at the point of investigation, firm should contract by decreasing its output to a level where MC equals MR. This method is specifically useful to very large organisations, with multiple divisions and where computation of total cost and total revenue may be a difficult and complex task.
Advantages of the Mixed Economy Necessary services are provided in a true market economy, services which were not able to make profit would not be provided. Incentive: Sin
For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per m
Estimating economic relationships Managerial economics estimates economic relationships between various business factors likeelasticity of demand, income, profit analysis, cos
PRINCIPLES OF AN OPTIMAL TAX SYSTEM When taxes are imposed certain conditions must be fulfilled. These conditions are known as Principles or canons of taxation. According to
Individual firm and market supply curves The quantities and prices in the supply schedule can be plotted on a graph. Such a graph is called the firm supply curve. A fir
A. Write a detailed essay on the importance of economics to managers. OR What is the role of managerial economics in organizations ? B. What are the methods of measuring nation
Question 1: a. Discuss the alternative theories of money demand. b. Highlight the impact of financial liberalization on the money demand in a small island developing econo
demand for sting ray
Question 1: Either ‘Today the business organizations are quite different from the traditional classical firm with a wide range of objectives.' Discuss the above statement
what are the Sources of public debt
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd