0
What else can I help you with?
Ceteris paribus a decrease in input costs to firms in a market will result in?
Ceteris paribus, a decrease in input costs for firms in a market will lead to an increase in supply. As firms incur lower production costs, they can produce more at each price level, shifting the supply curve to the right. This typically results in a lower equilibrium price and a higher equilibrium quantity in the market. Ultimately, consumers benefit from lower prices and greater availability of goods.
Why do firms try to sell more products or to sell them at higher prices?
To increase revenue. Revenue = Price x Quantity sold. So if a firm sells more products and/or sells products at a higher price, revenue will increase.
Why is the number of firms small in oligopoly market.explain?
By definition, oligopoly means 'a few firms'. The prefix olig- means 'few' in Greek (e.g.) oligarchy - 'rule of the few') and the suffix -poly is the description of a market.Three reasons an oligopoly may persist even without artificial controls include: 1) the market has high entry costs, which serve as a barrier to entry to new firms because high capital costs provide strict economies of scale to larger firms; 2) the oligopolistic firms collude to control the market and prevent competitors entering; 3) leading firms out-compete new firms by artificially lowering prices, initiating a price war which the smaller firms can't afford as larger firms with more financial capital can.
Price elasticity importance to individual firm and government?
Price elasticity has a lot to do with how firms and governments can predict costs and profits. The greater the elasticity, the more uncertain their financial projections will be.
Differences demand-pull inflation and cost-push inflation?
Demand-pull inflation: prices rise due to shortage; firms produce more and raise price to meet demand. Cost-push inflation: prices rise due to increasing costs of production; firms raise price in order to not produce less.
How do investment bankers generate revenues for their firms?
Investment bankers can generate revenues for their firms by the amount of money they bring in from their customers. By bringing in money, the firm will have more to invest.
For a firm to operate in the shortrun the total revenue must at least be equal to Why?
A firm would still operate if revenues are below total coots, but not if revenues are below variable costs. The reason is that as long as revenues are above variable costs, the firm will earn a difference to contribute to the fixed costs (fixed costs are costs that a company has to pay in the short-run whether it operates or not). If the firm stops operating in the short-run, it will have to pay for the full fixed costs (e.g., rent, some fixed labour) If revenues are below variable costs, for every unit of production, the company loses the difference and does not contribute to the fixed costs. It is more economical to shutdown in the short-run.
What is more profitable high contribution margin ratio or low?
Higher. It's your TR minus your Variable Costs over sales. So if you have a higher revenues coupled with low costs, you will have a higher contribution margin and more profitable.
How profit maximization is achieved?
Profit maximization is achieved when a firm increases its revenue while minimizing costs. This can be done by optimizing production processes, reducing waste, and improving efficiency to lower operational expenses. Additionally, firms can enhance pricing strategies, expand market reach, and innovate products to attract more customers. Ultimately, maintaining a balance between costs and revenues enables businesses to maximize their profits effectively.
When looking at recessions what are some of the major challenges that a firm is going to be facing to control their costs?
During recessions most companies will experience soft demand for their goods or services resulting in lower revenues. Since all companies have certain expenses that are fixed regardless of fluctuations in revenues it is a major challenge is to reduce fixed costs when revenues decline. Many fixed costs such as interest on debt, depreciation, and property taxes cannot readily be reduced. Due to the difficulties associated with reducing fixed costs many companies will immediately seek to reduce variable or discretionary expenses when revenues decline. Variable costs are directly correlated to the amount of goods or services produced and are more easily reduced. Labor is one of the biggest variable costs that can quickly be reduced by laying off employees which is why the unemployment rate increases dramatically during a recession. Companies can also reduce costs during recessions by eliminating or reducing discretionary expenses such as travel or entertainment. Laying off employees and cutting expenses are difficult choices to make but are necessary steps that must be taken by companies to avoid large losses or possible insolvency.
What are the names of some telecommunications consulting firms?
There are various telecommunications consulting firms that help companies look at their use of telecommunications and reduce the costs involved. The larger and more established companies include BBM, FTI and Fox Group.
Why do firms try to sell more products or to sell them at higher prices?
To increase revenue. Revenue = Price x Quantity sold. So if a firm sells more products and/or sells products at a higher price, revenue will increase.
The costs for firms operating on a global scale have been drastically reduced by what?
The costs for firms operating on a global scale have been drastically reduced by advances in technology, specifically in communication and transportation. These advancements have allowed businesses to streamline their operations, outsource tasks, and reach a wider customer base more easily and efficiently.
How joint venture enable a firm to maximize shareholder wealth?
Joint ventures allow firms to pool resources, expertise, and market access, which can lead to increased operational efficiency and reduced costs. By collaborating with another entity, firms can enter new markets more effectively and share risks associated with new projects, thereby enhancing growth potential and profitability. This strategic partnership can ultimately drive higher revenues and returns, maximizing shareholder wealth. Additionally, the combined strengths of both firms can lead to innovative products and services, further boosting competitive advantage and financial performance.
Why is the number of firms small in oligopoly market.explain?
By definition, oligopoly means 'a few firms'. The prefix olig- means 'few' in Greek (e.g.) oligarchy - 'rule of the few') and the suffix -poly is the description of a market.Three reasons an oligopoly may persist even without artificial controls include: 1) the market has high entry costs, which serve as a barrier to entry to new firms because high capital costs provide strict economies of scale to larger firms; 2) the oligopolistic firms collude to control the market and prevent competitors entering; 3) leading firms out-compete new firms by artificially lowering prices, initiating a price war which the smaller firms can't afford as larger firms with more financial capital can.
The price level in the US is more flexible downward than upward?
Price levels in the US tend to adjust more quickly downwards due to factors such as competition, lower production costs, and consumer demand. In contrast, upward price adjustments can be slower due to factors like sticky wages, market power of firms, and inflation expectations.
What Venture Capital firms would fund an online university startup?
If you are a 'start-up,' your initial round of financing typically is from yourself, friends and family; a second round usually is from angel investors. Under most scenarios, venture capital firms will consider investing after the company has operations, generating revenues and seeks $1-million and more capital.
