Appendix AECO561 Version 81 Part 1 In 150 Words For Both Que

Appendix Aeco561 Version 81part 1in 150 Word For Both Questions

Appendix A eco/561 Version Part 1: In 150+ words for both questions answer the following: 1. What are the relationships between fixed, variable, total, average, and marginal costs? Can you give examples of these costs for your organization/company? Do you have any suggestions to lower these costs? 2. Choose a company you are familiar with. Please comment on the elasticity of this company’s demand. Factors you may consider include the number of its competitors and the complements/substitutes of its product. Then, using the total revenue rule, comment on whether the company’s current price maximizes its revenue.

Part 2: Equilibration is the process of moving between two equilibrium points as a result of some change in supply or demand. Understanding how market equilibrium is sought following such a change is essential for business managers. It is important to understand how economic principles, and specifically supply, demand, and their determinants are a part of your everyday business decisions. Create a PowerPoint presentation using a real-world experience in a free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states. Explain the process of how that movement occurred using behaviors of consumers and suppliers. Graph the movement between the two points as well.

Required Elements: · Include academic research to support your ideas · Consider the Law of demand and the determinants of demand · Consider the Law of supply and the determinants of supply · Describe Efficient markets theory · Explain Surplus and shortage · Deliver the content in 7- to 10-slide Microsoft PowerPoint presentation · Use University of Phoenix Material: Appendix A to create graphs illustrating the movement between the two equilibrium points and include this in the body of the assignment. · Your assignment is consistent with APA guidelines. You need to include a cover slide and a slide with all your references. \n\nHint: Please notice that the law of demand/supply describes a movement along the demand/supply while the determinants or shifting parameters of demand/supply move/shift the whole demand/supply. \n\nYou need to be able to distinguish the two in your explanation. To address the last two points, you need to demonstrate why the market will move from the original equilibrium to a new equilibrium after a shift in demand/supply due to any surplus or shortage at the original equilibrium. You need to explain this in both words and a corresponding diagram. In the diagram, you need to identify both the old and the new equilibrium price and quantity.

Paper For Above instruction

The concepts of costs—fixed, variable, total, average, and marginal—are fundamental to understanding managerial decision-making in economics. Fixed costs are expenses that do not fluctuate with the level of production or sales, such as rent or salaries. Variable costs change directly with output, like raw materials or direct labor. Total costs encompass the sum of fixed and variable costs at any production level, representing the overall expense associated with operations. Average costs are derived by dividing total costs by the quantity produced, indicating the per-unit cost. Marginal costs refer to the additional cost incurred by producing one more unit, which is vital for optimizing production and profit. For example, in a manufacturing company, fixed costs might include factory leasing; variable costs could be raw materials; total costs combine both, while average and marginal costs help fine-tune production levels to maximize efficiency. To reduce costs, companies can negotiate better supplier contracts, improve operational efficiencies, or adopt technology to automate processes.

Regarding demand elasticity, consider a company such as Starbucks coffee shops. The demand for Starbucks products tends to be somewhat elastic because substitutes like other coffee brands or tea are readily available, and consumers can switch based on price changes. Additionally, the number of competitors—local cafes and international chains—affects this elasticity. If prices rise, consumers may switch to substitutes, making demand elastic; if prices fall, demand may increase without significant competitive loss. Using the total revenue rule—total revenue equals price times quantity—the company's current pricing should be aimed at a point where MR (marginal revenue) is zero to maximize total revenue. If the price is set too high, revenue may decrease due to reduced demand; if too low, revenue may also decline despite increased sales. Analyzing demand elasticity helps Starbucks determine optimal prices to maximize revenue without losing customers to competitors.

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