Condition for Profit Maximisation To maximise profit firms should produce up to the level of output where?marginal cost (MC)?=?marginal revenue (MR) Calculations To Demonstrate the Profit Maximisat...
Economies & Diseconomies of Scale As a firm increases its?scale of output in the long-run, its?long-run average total costs (LRATC)?will initially?decrease?due to the benefits it receives These...
The Relationships Between Different Types of Costs Fixed costs?are costs that do not change as the level of output changes These have to be paid whether output is zero or 5000 e.g. building rent, m...
Total, Average & Marginal Revenue Total revenue?is the total value of all sales a firm incurs ??? Average revenue?is the overall revenue per unit Marginal revenue?is the extra revenue received ...
Profit & Revenue Maximisation Profit Maximisation Most firms have the?rational?business objective of?profit maximisation Profits benefit shareholders as they receive?dividends?& also increa...
Reasons for Demergers A?demerger?occurs when a firm?sells off?at least one of the businesses it owns, or?splits itself into separate parts?to create two or more firms Reasons For Demergers Reducing...
How Businesses Grow Business growth can be?organic?or?external Organic growth (internal)?is usually generated by gaining greater?market share product diversification opening a new store internation...
Reasons for Growth & Reasons to Remain Small Many firms start small & will grow into large companies or even?multi-national corporations?(Amazon started in a garage) Reasons Why Firms Grow ...
Trade-offs Between Macroeconomic Objectives Policy decisions by?governments?often create a?trade-off?in the?macroeconomic objectives Achieving one objective may come at the cost of?worsening progre...
