2 essay exam questions Example | Topics and Well Written Essays - 250 words

2 exam questions - Essay warningWhen this employment run is optimized within the current output level, the total average terms per unit produces go out decrease based on the simple fact that frozen(p) cost per unit produced decreases as the subdue of output increases.Investopedia (n.d.) explains that the purpose of analyzing marginal cost is to determine at what point an organization fire grasp economies of scale. The calculation is most often used among manufacturers as a means of isolating an optimum production level. The benefit of producing one additional unit and generating revenue from that item give bring the overall cost of producing the product line down. The key to optimizing manufacturing be is to find that point or level as right away as possible.Various reasons can be considered. For a monopolistic moving in, keeping the products strawman in the market is necessary while waiting for the products improvements or innovations from the Research and instruction department. Once these product improvement or innovation is achieved, the put to work of events may become much bankable and may even achieve new heights of business success. Product substitutes may have caused the business to deteriorate. But as long as it is evident that product improvements or innovation will turn the tides of business back to original profitable track, it is worth keeping the business going. Otherwise, when there is no more prospects on the business line, continuing operation will just drain resources.(John Wiley & Sons, Inc , n.d.) states that if the firms average variable costs are less than its marginal revenue at the profit maximizing level of output, the firm will not shut down in the short-run. The firm is better off continuing its operations because it can cover its variable costs and use any remaining revenues to pay off some of its fixed costs.Demand curve for IPOD may rise with this increase on income level of young professionals.