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Friday 15 February 2013

Cost and Revenue Curves

Cost and Revenue Curves


Chito Paulo


ECO 561

November 16,2012
George Sharghi


Cost and Revenue Curves

Every alliance is concern about the good bottom line because it debates the troupe can sustain successful operation. The management determines strategy and methods to maximise the economic benefit or to minimize economic s conductding of the company. One turn up is to determine the output and price direct and comparing the marginal cost and marginal revenue with application of the marginal cost (MC) marginal revenue (MR) approach (McConnell, Brue, & Flynn, 2009).  This approach is based on the fact that when MC = MR (which is indicated as the foreland of intersection of the curves) the economic profit reaches its maximal descend or minimum loss.
The simulation on cost and revenue shows the interrelationship between the marginal cost and marginal revenue, and new(prenominal) factors that help a manager make rational decisions to maximize profits. The interrelationships were depicted in each of the scenario in the simulation. The first scenario involves choosing a state to make up the product that provides the greatest financial and operable benefits.

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A manager can make this decision by analyzing the behavior of the MC-MR curve and determining the point of greatest profit (MC=MR). The comparison between Florida and calcium using the MC-MR curve indicate that California is a better place to produce chromatic juice. At point MC=MR the FarmFresh Company can produce more orange juice and realize a maximum profit compared to MC=MR of Florida. This result is the effects of cheaper prices of orange, concerns for environment led to more efficient operation and reduction in cost, etc.
In scenario two, the prices of orange dropped. The price drop allowed the company in California to produce more orange juice. The price drop government agency the company has a new cost structure. On this situation, the point MC=MR moved to the right showing that as the prices of...If you exigency to get a full essay, order it on our website: Ordercustompaper.com



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