We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Short-run profit maximization - Assignment Example

Free
It is evident from the study that in business, you obviously want to avoid spending more money than you make. Speaking in terms of production, there is a point where when you start producing too much, it becomes unprofitable. Therefore, it is optimal for a company to produce as long as they are making a profit. After the optimal production point is reached, the company begins to lose money if they continue to produce. If you picture marginal revenue (the additional revenue generated from increasing sales by one unit) as a line on a graph, and picture marginal cost (the cost of producing one more unit) as another line on a graph, you can observe that the lines will intersect at some point. Up until this intersection, marginal revenue will exceed Marginal Cost, whereas after this point, marginal cost will begin to exceed marginal revenue. In business terms, we can think of citizens as shareholders and the president as the agent. Shareholders desire agents whose objectives are in alignment with their objectives. However, the objectives of the principal and agent can differ for a variety of reasons. For example, the president may have a personal motive for doing something that is detrimental to the goals of the citizen. What creates the agency problem, though, is when the agent hides the action and/or the information, making the problem more difficult to overcome. These agency problems occur in the business world between shareholders and managers as well as in business to business interactions.

Check these samples - they also fit your topic

Critical Evaluation of Adopting a simple profit-maximizing perspective can have positive impacts for a firm
Critical Evaluation of “Adopting a simple profit-maximizing perspective can have positive impacts for a firm”. A firm that has a profit maximizing perspective and idea, it has the major part of realized profit and sometimes the idea of maximizing the profit is not acceptable at the root level by the firm itself.
8 pages (2000 words)Assignment
Company profit calculation
Part (b) TC = ?MC = ?(3 + 6Q + 3Q2) = 3Q + 3Q2 + Q3 + c At a production level of Q = 0, the cost of capital remains $3: 3 = 3(0) + 3(0)2 + (0)3 + c c = 3 ? TC = 3 + 3Q + 3Q2 + Q3 Part (c) At Q = 3: TC = 3 + 3(3) + 3(3)2 + (3)3 = $66 Part (d) Tr = p (q) at P = $48 and q = 3: = $144 Part (e) Profit = TR – Tc = 144 – 66 = $78 Part (f) atc = tc / q = (3 + 3Q + 3Q2 + Q3) / Q ATC’ = (3Q2 + 6Q + 3) / 3 – (Q3 + 3Q2 + 3Q + 3) / Q2 ATC’’ = (6Q + 6) / 3 – (6Q + 3) / Q2 + 2 / Q3 (3Q2 + 3Q + Q3 + 3) At ATC’ = 0: Q4 + Q3 – 2Q2 – 3Q – 3 = 0 ?
5 pages (1250 words)Assignment
Ratios/Profit Margin
Among these statements include balance sheet, income statements and cash flow. Practically, financial ratios are calculated to help in analyzing trends, as well, as to conduct a comparison of the company’s financial performance with other companies in the same industry (Lewellen, 2004).
3 pages (750 words)Assignment
Wealth maximization concepts
(A) identify at least five key theoretical concepts from this week's readings, (B) relate each key concept to its application in an organizational setting, and (C) communicate well-researched information clearly, concisely, and in an organized manner.
3 pages (750 words)Assignment
Run Flat Tyres
Overtime there have been so many car tire manufacturers who have tried to develop that comfortable tire that meets the requirements of a car owner but this has been a very big challenge since tires are always subjected to different roads and
14 pages (3500 words)Assignment
Discussion Question 2 Week 10 - Short- and Long- Run Impact
According to Wagner & Dittmar (2006), the SOA has “benefitted firms’ governance, management, and investors” (p. 1) through enabling the improvement of the following endeavors: “standardize and consolidate key financial processes
1 pages (250 words)Assignment
Profit and loss account -
A higher ratio reflects high sales. Since a grocery deals with fast moving goods, which are perishable, we expect the stock turnover to be higher. In this case then B is the grocery store and A is of manufacturing concern. A company performance is mostly
1 pages (250 words)Assignment
Economics
The equilibrium condition of the PC market is shown in the following diagram:- The condition for profit maximization is MR=MC. The price is constant given the assumption
4 pages (1000 words)Assignment
Maximization of Shareholder Wealth
This process is the underlying objective of all corporate activity. Shareholder wealth maximization is a long-term financial goal, which is comprehensive and reflects
1 pages (250 words)Assignment
Quiz
are provision of satisfaction or utility to consumers and provision of profits to the producers according to the rational choice theory (Frostater, 13). This means that currently the neoclassical economics contributes to a mainstream economic situation. There is formation of
3 pages (750 words)Assignment
In a way, managers do get in the way of achieving shareholder goals. This is simply because, in addition to trying to satisfy shareholder objectives, managers have their own individual motives which they act upon and conceal from their shareholders. Managers and employees act on and hide these actions for a variety of reasons. Perhaps they feel they are not being compensated fairly so they don’t put their best effort into the job. Or maybe they are trying to take advantage of the situation by doing as little work as possible. A manager could also sacrifice long-term growth for short-term growth in order to land a promotion or another job. So yes, managers do get in the way sometimes, but ultimately someone has to do the job the shareholders require, and it’s their job to pick the best candidates possible and make sure the managers are invested and motivated to help the shareholders reach their objectives. 3. The Agency Problem, Part 2 My employer deals with the agency problem in a variety of ways. They monitor what the CEO is doing and meet with him often. They discuss the direction they want the company to go in and make sure that is communicated to the CEO, who then makes sure it is communicated to managers and employees. They also review financial statements to see what is being done. Additionally, they look at what is being produced to determine if it accurately reflects the values of the company. Monitoring what is being pro
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Short-run profit maximization Assignment Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/5032-economics
(Short-Run Profit Maximization Assignment Example | Topics and Well Written Essays - 750 Words)
https://studentshare.net/finance-accounting/5032-economics.
“Short-Run Profit Maximization Assignment Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.net/finance-accounting/5032-economics.
  • Cited: 0 times

Summary

The purpose of the researcher of this paper is to present the following texts: Short-run Profit Maximization and The Agency Problem. The researcher of this paper also makes appropriate recommendations and conclusions…
Short-run profit maximization
Read TextPreview
Comments (0)
Click to create a comment
Let us find you another Assignment on topic Short-run profit maximization for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us