Purchase Solution

Costing

Not what you're looking for?

Ask Custom Question

Using the following demand schedule, calculate total revenue, marginal revenue and own-price elasticity of demand. Then show the relation among marginal revenue, price and elasticity of demand.
Quantity Marginal Elasticity
Price Demanded Revenue Of Demand
$60 8
50 16
40 24
30 32
20 40
10 48

-------------------------------------------------------
The first two columns in the following table give a firm's short run production function when the only variable input is labor, and capital (the fixed input) is held constant at 5 units. The price of capital is $2,000 per unit, and the price on labor is $500 per unit.

Units Units COST
of of Average Marginal Fixed Variable Total
Labor Output product product
0 0
20 4,000
40 10,000
60 15,000
80 19,400
100 23,000

AVERAGE COST Marginal
Fixed Variable Total cost

a. Complete the table
b. What is the relation between average variable cost and marginal cost? Between erage total cost and marginal cost?
c. What is the relation between average product and average variable cost? Between marginal product and marginal cost?

Purchase this Solution
Solution Summary

The solution does a great job of explaining the concepts being asked in the question. The attachment shows all the calculations related to the first question. The posting then answers the demand elasticity question in detail. Marginal Product and marginal cost calculations are shown in detail as well. The response explains the concepts very well and in detail. It is ideal for students looking to get a detailed understanding of the topic. Overall, an excellent response.

Solution Preview

1) Please refer to the attached calculation table.
Here, I'd like to explain in detail the Own-Price Elasticity of Demand
a.The Definition: Price elasticity of demand - a measure of responsiveness of quantity demanded to changes in price.
Price Elasticity of Demand = Percentage Change in Quantity Demand (Sales)/ Percentage Change in Price
b. The own-price elasticity of demand will always be negative, because if price increases, quantity demand will fall; and if price decreases, quantity demand will increase. In other words, one factor in this ratio will always be negative, so the ratio will always be negative.

c. Calculating the Price Elasticity of Demand
The point formula: ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Job Costing OR Process Costing

    127232 Job Costing OR Process Costing Job costing, process, costing. In each of the following situations, determine whether job costing or process costing would be more appropriate. a). A CPA firm b). An oil refinery c).

  • Standard costing vs other concepts of costing

    marginal costing can be applied, absorption costing vs normal costing, absorption costing vs marginal costing,absorption costing vs process costing,job costing,actual costing and meaning and steps involved in activity based costing.

  • Job costing,Process costing,operations costing

    221254 Managerial: How do job costing, operations costing and process costing differ? How do job costing, operations costing and process costing differ? Provide two typical examples of products or organizations for each system.

  • Similarities and Differences in Job Costing and Process Costing

    589209 Similarities and Differences in Job Costing and Process Costing Explain the similarities and differences between job order costing and process costing.

  • Job or Process Costing

    192318 Determine whether job costing or process costing would be more appropriate. Job costing, process costing. In each of the following situations, determine whether job costing or process costing would be more appropriate. a. A CPA firm b.

  • What is full costing? Define and compare job order costing a

    394145 What is full costing? Define and compare job order costing and activity-based costing. What is full costing? Define and compare job order costing and activity-based costing. What is full costing?

  • Similarities & Dissimilarities of Job and Process Costing

    The answer contains the meaning of job costing, process costing, differences and similarities between job order costing and process oreder costing.

  • Activity Based Costing and Competing With a Pending Threat

    Retrieved from http://www.accountingtools.com/activity-based-costing Jonson, R. (2014). Traditional Costing Vs. Activity-Based Costing.

  • SAC

    Job costing, contract costing, process costing, operational costing and batch costing are the different methods of costing.

  • Variable and Full Costing Income:Comprehensive Problem

    Prepare an income statement using full costing. b. Prepare an income statement using variable costing. c.

View More Related Solutions