A Brief Note On Management

Submitted By Indrapra
Words: 344
Pages: 2
Open Document
a. Total output increase: Due to competition, firm optimizes their time & resources to produce product. Firms look for comparative advantage in order to increase production and optimize cost. To compete with world leader firms does extensive analysis and reallocate their resources if need to in order to produce product which minimizes cost and increase productivity.
Higher output → Increase income → Increase savings → more investment → Economic growth →Higher Productivity

b. Innovation & productivity: Competition always give birth to new ideas, new technology, and new innovations which improves productivity. New technology helps to produce product efficiently and minimizes wastage. Competition encourage firms to make product which meets or exceeds customer requirement. Thus innovative activity will increase firm’s productivity.
c. Product differentiation: Competition is essential to produce best quality product, to develop unique design, to maintain price level. To make business successful & to avoid losses from competitor, firm try to improve productivity by adopting cost-efficient strategy. For example Since IKEA sales well designed furniture in affordable prices, other US furniture manufacturers need to improve their quality and maintain competitive pricing.
d. Labor productivity: Labor plays important role in competitive market and firm’s productivity is directly depend on labor’s productivity (how much labor is going to produce in given time period) and labor cost.
Show More

Related Documents: A Brief Note On Management

Economic Profit Essay

seek to maximize economic profit, which is the difference between total revenue (the price of the firm’s output multiplied by the quantity sold) and its total opportunity cost of production. Firms in perfect competition are price takers, meaning that a firm that cannot influence the market price and so it sets its own price equal to the market price. Because the firm is a price taker, its marginal revenue—which is the change in total revenue that results in a one-unit increase in the quantity sold—is…

Words 1104 - Pages 5

Regional Multipliers Essay

Substituting: Y=Co+I+G+X+Mo1-c-m(1-t) Letting k (regional multiplier) k=11-c-m(1-t) Y=k(Co+I+G+X=Mo) k is dependent on the value of the term (c-m) –marginal propensity to consume locally produced goods -As (c-m) increase- k increase -And vise versa * Regions with few local suppliers have a high m-(c-m) is low & k is low * Regions with strong interfirm linkages have low m-(c-m) is high &k is high * Factors affecting (c-m): * 1. A region’s size…

Words 1322 - Pages 6

Week 09 Day 2 Chapter 7 Overheads Essay

in the Short Run Economic vs Accounting Profit Time Horizons in Decision Making Production in the Short Run Total Product, Marginal Product, Average Product Law of Diminishing Returns Optimal Use of Resources (Section 13.2) Costs in the Short Run In the next 5 chapters, we focus on the sellers’ side of product markets. A key assumption is firms want to maximize profit. Firms use inputs (also known as factors of production) to produce an output. The amount of a firm’s output depends on the…

Words 2511 - Pages 11

Economics Concept Notes Essay

Economics Concept Note Cost & Revenue Theory 2 The Law of Diminishing Returns 3 Economies of Scale 4 Opportunity Cost & Production Possibility Frontiers 5 Cost & Revenue Theory There are five main types of production costs which are defined and explained below: 1. Fixed costs (FC) are costs such as rent and interest which do not vary with output. These costs still have to be paid by the firm in the short run whether or not they are producing output. 2. Variable costs (VC) are costs such as…

Words 1308 - Pages 6

Overview Of Microeconomics

Midterm #1 Overview of Econ 1 Microeconomics – decision making by individual economic agents Externalities, private business, distribution of income, asymmetric information Macroeconomics – economy as a whole Behavior of consumers, business, government agencies, and international companies Usually applied to national economy but can be used on any aggregation of economies Goal of course - want to apply economic principles to the real world Evaluating Policy – have to compare the policy’s…

Words 3692 - Pages 15

Question and Answer Essay

Variable Cost, Average Total Cost, Marginal Cost, Total Revenue, Marginal Revenue, and Total Profit at the top of the column in the gray section within the table. b. Fill in the missing values for Total Fixed Cost, Total Variable Cost, Average Fixed Cost, Average Variable Cost, Average Total Cost, Marginal Cost, Total Revenue, Marginal Revenue, and Total Profit in the blue sections of the table. Winsome Widget Factory | Output | Total Fixed Cost | Total Variable Cost | Total Cost |…

Words 1258 - Pages 6

Definition Of Marginal Revenue

Marginal revenue is the increase of profit as the result of one additional unit of output. The article “Marginal Revenue – MR” states that, “marginal revenue is calculated by dividing the change in total revenue by the change in output quantity” (“Marginal Revenue – MR,” n.d.). Marginal revenue’s relationship to total is defined by the Ingrimayne.com article, “Revenue and Demand,” as “selling another unit increases total revenue, the marginal revenue must be greater than zero” (“Revenue and Demand…

Words 736 - Pages 3

New Microsoft Word Document Essays

maximization, where total revenue (R) is the product of the physical volume of output sold (Q) and the market price (P) per unit of output sold. Even if Q is very large, at P=O, the total revenue earned R=O. Thus there will normally be an well- determined output level, Q which maximizes the total revenue earned, R. This level can be ordinarily fixed by satisfying the first order condition, = 0, zero marginal revenue which implies that maximum revenue is obtained only at an output at which elasticity…

Words 664 - Pages 3

Economics and Production Function Essays

production function, raw materials, total product, marginal product, stages of production, diminishing returns Reading Strategy Graphic Organizer As you read about production, complete a graphic organizer similar to the one below by listing what occurs during the three stages of production. Stage I Stage II Stage III Objectives After studying this section, you will be able to: 1. Explain the theory of production. 2. Describe the three stages of production. Applying Economic Concepts Diminishing Returns…

Words 2068 - Pages 9

Econ Essay

For the firm shown in the graph above, the short-run, profit-maximizing strategy would be to set output at (A) Q1, price at P1, and suffer a loss (B) Q1, price at P3, and earn an economic profit (C) Q1, price at P3, and earn only a normal profit (D) Q2, price at P2, and earn an economic profit (E) Q2, price at P2, and earn only a normal profit 12. Which of the following will tend to make the demand for a product more elastic…

Words 4136 - Pages 17