Example on changes in fixed costs and profit maximisation, Managerial Economics

Assignment Help:

Q. Example on Changes in fixed costs and profit maximisation?

What if arena owner in the illustration above triples the fee for the subsequent concert but all other factors are the same. What price must the promoter now charge for tickets in light of the fee increase?

The same price of Rs. 10

Fee is a fixed cost, which promoter should consider a sunk cost and simply ignore it in calculating his profit maximising price. Only effect is that promoter's profit will be reduced by Rs. 20, 000.


Related Discussions:- Example on changes in fixed costs and profit maximisation

Open economy, Open Economy None of the three economies considered so f...

Open Economy None of the three economies considered so far are engaged in trade with Foreign Countries.  Such economies are often referred to as Closed Economies.  In contrast

Concept and phases of trade cycle , CONCEPT AND PHASES OF TRADE CYCLE ...

CONCEPT AND PHASES OF TRADE CYCLE Broadly speaking, the trade or business cycles are those fluctuations which recur in economic activity with a certain degree of regularity fo

Factors influencing supply - prices of factors of production, Prices of the...

Prices of the factors of production As the prices of those factors of production used intensively by X producers rise, so do the firms' costs. This cause supply to fall as some

Early theories about wage determination, Theories of wage determination ...

Theories of wage determination Early theories about wages The earliest theories about wage determination were those put forward by Thomas Malthus, David Ricardo and Karl

Disadvantages of progressive tax, Disadvantages The effect on ince...

Disadvantages The effect on incentives High  progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk

Long run equilibrium for the firm, LONG RUN EQUILIBRIUM FOR THE FIRM S...

LONG RUN EQUILIBRIUM FOR THE FIRM Since there is freedom of entry into the industry the surplus profits will attract new firms into the industry.  As a result the supply of th

International financial institutions, INTERNATIONAL FINANCIAL INSTITUTIONS ...

INTERNATIONAL FINANCIAL INSTITUTIONS In July 1944, a conference took place at Bretton Woods in New Hampshire to try to establish the pattern of post-war international monetary

Exchange rate, Assume a floating exchange rate system. The Fed pursues an e...

Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table

Indirect taxes, INDIRECT TAXES These are imposed on an individual most...

INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers.  They can also be de

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd