Order Now Order Now
Login / SignUp
Order Now

Home Free Essays

>>

All Subjects

>>

Economics

>>

Firms In Competitive Markets

Firms In Competitive Markets

Download

[Name of the Writer]

[Name of Instructor]

[Subject]

[Date]

Firms

The current production of the firm is 500 units, where the average total cost is 200. When the new customer order for an additional unit, then I will not accept the offer because an additional unit will result in a loss instead of profit. This is because the client is offering 450 dollars for an additional unit, but the average cost of that extra unit will be 701 dollars, which means firms will face the loss of 251 dollars. In the competitive market, the firm cannot increase profit by increasing price; that is why they increase their production until marginal cost remain equals marginal revenue. However, adding one more unit marginal cost of the product is exceeding the marginal revenue; therefore, it is better to reject the offer by the new client. Total cost before adding one more unit is 100000, but after adding one unit, it will become 100701, where the customer is willing to pay 450 dollars only. In other words, net change after adding one more unit would be 701 dollars. By subtracting revenue from the payment of the customer value obtained would be -251which indicating the loss for the firm. This is why it is better to reject a new customer rather than accepting its offer and facing loss.

More Subjects

Education

(5614)

English

(2294)

Business And Management

(1760)

Healthcare And Nursing

(1684)

Psychology

(929)

History And Anthropology

(743)

Sociology

(572)

IT

(446)

Education

(429)

Finance, Accounting And Banking

(419)

Philosophy

(347)

Political Science

(310)

Law And International Law

(308)

HRM

(300)

Economics

(288)

Biology And Life Sciences

(267)

Literature

(249)

Marketing And PR

(238)

Culture

(140)

Environmental Science

(109)

Geography

(92)

Statistics

(64)

Maths

(53)

International Relations

(44)

Physics

(30)

Chemistry

(25)

Capstone

(8)

Project Management

(8)

Reflective Thinking

(7)

Critical Review

(3)

Linguistics

(3)

Critical Appraisal

(2)

BUS 2090

(2)

English 12 Drama

(1)

Business Information Technology

(1)

Operational Plan

(1)

Corporate Finance

(1)

L2 Photography And Design

(1)

Food Nutrition

(1)

Leadership

(1)

Nursing

(1)

MBA

(1)

Social Enterprise Project

(1)

Government

(1)

Our tools

Essay typer Grammar Checker Plagiarism Checker Citation Generator

Useful Links

Free Essays About Blog

Contact me

info@freeessaywriter.net

If you have any queries please write to us

Join our mailing list

Invalid Email Address!
Thank you for joining our mailing list

Please note that some of the content on our website is generated using AI and it is thoroughly reviewed and verified by our team of experienced editors. The essays and papers we provide are intended for learning purposes only and should not be submitted as original work.

© All Rights Reserved 2023

Privacy Policy Terms of Service Use Money-Back Guarantee Contact
Back to top