It may seem that if a company could produce an infinite number of units of product, it would realize the maximum profit. Using microeconomic theory, explain why this is not the case
Microeconomic theory states that profits will be maximized when the difference between total revenue and total cost is greatest. Total revenue then increases more slowly, because as a product is marketed, price reductions are necessary to sell more units. Total cost increases when larger quantities are produced because fixed costs change. Profit is maximized at the point where the marginal revenue and marginal cost curves intersect.
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Redo is a market follower in the wristwatch industry. After noticing a shortfall in the market leader's product, Redo improves its product to suit consumer needs and becomes a challenger for the market leader. This is an example of ________
A) counterfeiter B) cloner C) imitator D) adapter E) innovator
In its first year of business, Lakota, Inc. produced 600 units and sold 400 units. If Lakota uses variable costing, ________.
A) its operating income for the period will be higher than under absorption costing B) its operating income for the period will be lower than under absorption costing C) its value of ending Finished Goods Inventory reported in the balance sheet will be higher than under absorption costing D) its operating income will be the same as under absorption costing
________ of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider.
A. Tangibility B. Variability C. Intangibility D. Separability E. Perishability
The __________________ type of organizational structures are more common in small organizations where there is one central authority figure, usually a business owner, who tends to make the decisions.
What will be an ideal response?