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WHAT IS production equilibrium?
Production equilibrium occurs when a firm produces a level of output where marginal cost equals marginal revenue. At this point, the firm maximizes its profit, as any increase or decrease in production would lead to lower profits. In a broader economic context, it can refer to a state where supply equals demand, resulting in stable prices in the market. This equilibrium ensures that resources are allocated efficiently in the production process.
Factors responsible for inflation?
Inflation can be caused by factors such as excess demand, cost-push inflation from rising production costs, excessive money supply growth, and external shocks such as oil price increases. These factors can lead to an increase in overall prices of goods and services in the economy.
What is mark up system?
A markup system is a method used to add value or increase the price of goods or services. It involves calculating the difference between the cost of producing an item and its selling price. The markup is usually expressed as a percentage of the cost price.
What does production involve?
Production involves a number of things and stages. This will include finding and processing raw materials which will be packed as finished products.
A cost that does not change no matter how much of a good is produced is?
A cost that does not change regardless of the quantity of goods produced is known as a fixed cost. Examples of fixed costs include rent, salaries of permanent staff, and insurance premiums. These expenses remain constant even if production levels fluctuate, making them essential for budgeting and financial planning in a business.
What is the factor that supply curve to shift right?
A increase in supply will be because of an: Increase in technology, change in production climates (positive change), cost of production decrease or increase in number of producers,changes in the prices of other goods and services, subsides.
What is maginal cost?
Marginal cost is the increase or decrease in the total cost of a production run for making one additional unit of an item.
When the price of a capital good increase what happens to the prices of related consumer goods and services?
Prices increase due to the increase in production cost.
What is the relationship between cost to sellers and the supply curve?
The cost to sellers directly influences the supply curve in that as production costs increase, the willingness and ability of sellers to produce goods at existing prices decrease. This typically results in a leftward shift of the supply curve, indicating a decrease in supply. Conversely, if production costs decrease, sellers are more likely to supply more at each price level, shifting the supply curve to the right. Therefore, the relationship is fundamentally tied to how costs affect production decisions.
Why is Mass Production important?
The technique of mass production makes it possible to produce goods at lower cost, which means that more people can afford to buy those goods, and the standard of living of the population will increase.
What is the relationship between the average cost curve and the production costs of a firm?
The average cost curve shows the average cost per unit of production for a firm. It is derived from the total cost curve, which represents the total cost of production at different levels of output. The average cost curve is U-shaped, indicating that as production increases, average costs initially decrease due to economies of scale, then increase due to diminishing returns. The relationship between the average cost curve and production costs is that the average cost curve reflects how efficiently a firm is producing goods or services in relation to its total costs.
Is cost of goods sold a fixed or variable or mixed?
Cost of goods sold (COGS) is primarily considered a variable cost because it fluctuates with the level of production or sales. It includes costs directly tied to the production of goods, such as materials and labor, which increase or decrease based on the quantity sold. However, some fixed costs, like certain overhead expenses, may also be allocated to COGS in specific accounting practices, making it potentially mixed in certain contexts. Overall, COGS is predominantly variable.
What is Graph the relationship between cost and number?
They are inverly related ,number increase cost decrease as wellas cost increase may qulity & number decrease
To adjust a companys LIFO cost of goods sold to FIFO cost of goods sold?
a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold.
A large extraordinary loss has what effect on cost of goods sold?
A large loss will cause the cost of goods to increase. The cost of goods will increase because the organization will attempt to recoup the money.
You move along a given demand curve?
Which is the following example of factor that would move a demand curve? A) increase gst b)decrease in cost of raw material c)decrease in subsidy d)decrease in price of complemantery goods
What are the different economic and non economic costs of unemployment?
Economic costs is the decrease in goods and services that occurs as result of unemployment but non-economic cost is the increase in goods and services that occur as result of unemployment.
