Introduction to Economics For Business
Margin revenue is the additional revenue that can be attain by any firm by producing extra unit. Marginal revenue of monopolist is always equal to the price of that particular goods. Recently, government should focuses on level where they reduce total average cost by cutting demand curve level (Baye, 2010). On this project we study, by cutting demand curve level provide benefits to the country are discussed in an appropriate manner. Furthermore, it will also provide information in regard to average total cost curve.
Benefits For Firm
Additionally, there are several benefits that any firm receive through application of level where total average cost curve cut the demand curve. With the help of this benefits, company can achieved its goals and objectives in a competitive environment by presenting it into the market in an effective manner. Along with that, there is another benefit for an organisation that is marginal revenue intersecting the marginal cost (Bold and Vega, 2003). With this company can achieve their long term opportunities goals by controlling overall cost of a firm that leads to improvement in customer base. These demand curve allow the firm to set the price of goods and service at that level where customer or citizens are ready to pay at fair price (Lee, 2014). This leads to improvement in turnover of a company by increasing in firm's sales for products and services. In addition to this, various loss and risk that are arise in the firm will also be reduced at some desired level that help them in attaining goals and objectives of a firm. In order to develop best and better learning there is only few formulae that help in reduction overall total cost (Cardoza and Fornés, 2011).
Average Total cost = Total cost/ Quantity
30000/1000= 30, This formulae tells that total cost of a firm is 30,000 and the quantity of a product is 1000 so the total average cost arise is 30. Let assume that the price of a goods and services is 100 which said that an organisation face various problems in relation to loss. Lets in another situation we take price that is assume to be 400 it means that firm overall margin of profit becomes advanced. But in that situation company suffer loss in long term when it increase price of a product it will reduce demand of a product in future.(Ceccherini-Nelli and Priebe, 2007). Lets take an example. A firm offer service that is 400 pounds and the total average cost is 300. It can be said that a firm set its pricing at that level where customer not able to pay at that price. In that situation, customer shift towards another firm who offer best or low price than 400 pounds . It shows that company get benefits of that level where the demand curve cuts the overall average cost only in long time period. Additionally, it firm set price at 300 pound this means that there is a minimizing the risk of loss. It reduce the risk of loss only when there is average cost is 300 which is equal to price. This leads that the demand curve goes into upward direction for long time that directly help them in achievement firm's goals and objectives (Dowling, 2009). This will encourage the firm to contribute to the country so there is an economic development and it also help them to make sure that profit of margin can be achieved in advanced in an effective manner. It not only advance profit margin but it also increase the sales of a company that leads to increase in the level of success of a firm. Business firm improve its operational effectiveness only when they have an effective consideration of level where the demand curve cut the total average cost curve. It also help them by protecting from instant fluctuation happen and it also help in meeting needs (Hoover, 2009).
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With support of that, various key elements of an efficient economic development can be allow and understand in an appropriate manner. With the help of graph, we can see that Average total cost curve is higher than the demand curve it means it give negative impact to a business firm. It is same for the level of scale if it is lower than the total average cost it also effect negatively as well(Guner, Ventura and Xu, 2008). However, the price and the marginal cost of a product is at the same level this will increase the demand of the product in a market. This shows that firm get benefits in relation to better competition in the competitive market that help them in attaining firm's goals and objectives in an effective manner. Moreover, the demand curve also give direction with an aid of decision regarding cost that can be reduced in relation to production cost.
This will also help them in achieving goals and objectives by minimizing risk of production cost in an appropriate manner(Gustafsson, Johnson and Roos, 2005). Marginal cost can be influence only in an desired manner if, the average total cost is above than the demand curve. To control the cost in an efficient manner a firm have to focus on key areas where cost can be controlled by. In total cost it includes fixed cost, these cost cannot be changed with the change in a variable cost and output that are needed in the production. Fixed cost can be vary only when there is any change in the output level (Jabnoun, 2009). Lets taken an example, if a firm have a business of producing desktop and Electronic equipments it means that firm produce only variable cost. On the other hand, firm produce fixed cost of equipment's that is used in the production of goods. This means that fixed cost deliver increase capacity of productivity that will directly help in achieve goals and objectives in an appropriate manner.
COST IMPACT ON FIRM
Additionally, the application of pricing at that level where the demand curve help them in cut the total Average cost curve give a positive aspect on overall cost of a firm. This will also give positive impact on decision making process leads to has a positive effect on total cost. With help of this, firm's objectives and goals can be achieved by controlling overall firm's cost in an appropriate manner (Jorgenson, and Stiroh, 2006). Along with this, It allow the firm to set out the pricing so it help them in achieving objectives and goals with the help demand curve that cuts the total average cost. If the marginal cost is equal to the price according to the competitive ;prospect it means firm can achieved its objectives in a desired manner.
30000/100= 300, it can be explain that the the total cost is 30,000 and whereas, quantity of product is 100. In that situation the production cost is higher than the price. This means that it increase the loss that will generating issue of financial. This will highly impact on the overall cost of a firm in a desired manner. Along with that,it can be said that the overall cost of a firm is almost same as a scale only when the pricing is equal to the total average cost that is 300. In that situation, the overall cost of production can be handled by an organisation (Lee, 2014). Better division of resources helps in taking advantages in a suitable manner. While the patent give an impact, the business earn profit by manufacturing at there when the MR=MC and Price = MC. As many business entering into a market, demand curve become elastic that is faced by an organisation, until when the marginal revenue is equal to the price(Lusardi and Mitchelli, 2007).
Moreover, with the help of curve it can be said that cost of production decision can be improved by a firm. Cost of risk can be minimising leads to help in attaining objectives in an effective manner. It will effect the marginal cost level in an appropriate manner if the average total cost is above the level. This can be improve with help of focusing on key areas where the cost can be handle in an effective manner.
It can be said that the government take initiatives on sustainable improvement by focussing on overall improvement. They can transformed various policies and standards according to the needs of a firm. Along with this, It can be suggest that adaptability to the organisation that give facility to set the pricing according to their needs and demands of a customer. It will also help in enhancing the profit margin ratio of a all business that help them in attaining goals and objectives in a suitable manner. It has been said it is a method that change in the standards that allow to change the policies of a company. In addition to this, government should protect the interest of firm's customers by regulating monopolies. While designing policies and standards they should involve both customer and companies that will also help them in accomplishing firm's goals and objectives in a desired manner.
In addition to this, government should regulating the taxation policies that will also improve the monopoly of an organisation. Along with that, a firm can make change in taxation policies that will also help them in achievement in goals and objectives in an effective manner. Government can control and regulate its taxation policies so that they can charge high ratio of profit it can be only if a firm is not favourable the belief of government. There are various taxed that is commodity taxes such as sales tax and excise duty. Excise duty are that which can be levied on manufacturing whereas sales can be on selling of product in another state. There are various component that can be taken into considered as critical component that lead to achieved the objectives of a firms in an effective manner. In Addition to this, the enforcement of equally monthly installments taxes that is paid by firm is also a critical component that are mention by the government effectively in order to secure various issues. It will take initiatives to control on activities and also conform that this control above pricing are also taken into consideration. Moreover, marginal cost is an key component that can also be improved and mention effectively so that directly leads to achieve company's goals and objectives in an appropriate manner. Government should also control price regulation so they can control in an effective which can be taken into consideration above monopoly of a firm.
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In the project report, we conclude that marginal revenue is always equal to the price of a product. Along with that, marginal revenue help in earn extra revenue to a firm by producing additional units of output. In that situation firm get several benefit from monopolist marginal revenue by producing extra unit and attain firm's objectives in an appropriate manner. It can be possible if the demand curve cuts the total average cost curve. With the help of this, firm should present in a market in an effective manner so they can achieve objectives and goals successfully. It also allow the firm to set their price according to its comfort zone and it also help in contribute to the economic development in an efficient and effective manner. This leads to earn profit margin for a long time period. Along with that, It has a great impact on firm's cost due to application of pricing at that level where the demand curve cuts the total average cost. It will also have a positive impact on decision Making in relation to cost. With the help of that, total cost of a firm can be control lead to increase the firm sales and generate revenue in short time periods that leads to attain goals and objectives. Firm also attain their objectives and goals when it equal the cost and price of a goods in an effective manner in a competitive world.
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