Loss at the point of equilibrium, Managerial Economics

Assignment Help:

Q. Loss at the point of equilibrium?

Losses: At the point of equilibrium i.e. E where MR = MC, firm produces OM amount of the output. To produce this output, firm incurs an average cost of PF whereas it earns average revenue that is equal to ME. Because at equilibrium MF > ME, (AR

1473_Loss at the point of equilibrium.png

Figure: Losses

In-spite of incurring loss, firm could continue its functioning because it's Average Variable Cost is being covered. At output OM, firm covers its AVC that is equal to MG. Therefore as long as the firm is recovering at least its AVC, it would be possible for this firm to continue functioning.


Related Discussions:- Loss at the point of equilibrium

Neo classical vs keynesian school, Neo Classical vs Keynesian School W...

Neo Classical vs Keynesian School We know that Keynesian economics was propounded as a revolution against the then  prevailing orthodoxy  of  the classical school.  In  time,

The effect of this immigration on wages, An Economy consists of two regions...

An Economy consists of two regions, the North & the South. The short-run elasticity of labor demand in every region is -0.5. Labor supply is perfectly inelastic within both regions

Meaning of desire for a commodity, Desire for a commodity This validat...

Desire for a commodity This validates that a want or a desire doesn't develop into a demand except it is supported by the ability and willingness to acquire it. For example, a

What is managerial economics according to spencer, What is Managerial econo...

What is Managerial economics according to Spencer and Siegelman Spencer and Siegelman:  Managerial economics is "the integration of economic theory with business practice for t

Determine the negotiate a wage increase, Mark works for Maple Feel Inc., wh...

Mark works for Maple Feel Inc., which exports maple syrup to Slovakia. Currently, he generates $60,000 a year of net revenues for the firm and his salary is $60,000 per year. Mark

Point elasticity of demand, calculate point elasticity of demand for demand...

calculate point elasticity of demand for demand function q=10-2p for decrease in price from rs 3 to rs 2

Arguments against monopoly, Arguments against Monopoly However monopol...

Arguments against Monopoly However monopolies have been accused of the following weaknesses. Diseconomies of scale While the monopolistic firm ca

Demand-pull inflation, Demand-pull inflation is when aggregate demand exce...

Demand-pull inflation is when aggregate demand exceeds the value of output (measured in constant prices) at full employment.  The excess demand of goods and services cannot be met

Explain discrete-event simulation, Q. Explain Discrete-event simulation? ...

Q. Explain Discrete-event simulation? Discrete-event simulation: Operation of a system is signified as a chronological sequence of events. Every event take place at an instan

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