Economics for Business Coursework Example | Topics and Well Written Essays - 1500 words

Economics for Business - Coursework ExampleTo find it, divide the total receipts (TR) by the measuring rod of production (Q). Average Revenue (AR) divided by per unit cost of go forthput AR= TR/Q (Q) (TR) (AR) 0 0 0 1 27 27 2 53 26.5 3 78 26 4 102 25.5 5 125 25 6 147 24.5 7 168 24 8 188 23.5 9 207 23 10 225 22.5 Marginal revenue is the additional revenue that turn ups from increasing from increasing siding by iodine unit. This means the additional revenue per additional unit of take. This is the difference between total revenue per every(prenominal) additional unit of output. The marginal revenue is abbreviated using (Z) (Q) (TR) (Z) 0 0 0 1 27 27 2 53 26 3 78 25 4 102 24 5 125 23 6 147 22 7 168 21 8 188 20 9 207 19 10 225 18 b) Graph of just cost and marginal cost verse units per out put Red Marginal cost Blue average cost Graph of average revenue and marginal revenue verse units per out put Red Marginal cost Blue average cost C) Profit is obtained by subtracting the t otal revenue from the total costs at the maximum is at five units per put 625- 250 = 375 d)The economic profit for the company is positive, then the firms decision are optimal. That is, its price and output yield a profit larger than any alternatives prices that output. The type of market that this firm is operating on is oligopoly (BBC Economy tracke, 2010). Oligopoly prices are expected to be more stable that those in a monopolistically competitive market. This is clear in the graph that results in long run oligopoly market equilibrium of a Price/output solution that is identical to that of a competitive market. 2) a) Economic factors that led to the most recent recession of 2008/2009 accept Main causes if recession Credit crunch in U.K the U.K mortgage lending caused very serious problems for the Yankee Rock. It had a high percentage of risky loans. When the subprime crisis hit, the Northern Rock could no longer raise bounteous funds for the usual capital market. It had to borrow emergency funds from the Bank of England. As a result of the credit crunch, the U.K saw a change in the mortgage market. The mortgage started to become expensive. Falling of stand prices in the U.K - since getting mortgages became difficult, the demand for houses started to fall. This was also related credit crunch. Cost push inflation curtail income and reducing disposable income. The fall in confidence of the financial sector that caused lower confidence amongst accredited economy. Supply side shock in this case higher oil prices would increase cost of production and the effect would lead to a short run aggregate supply to shift to the left. Demand playground slide shock the factors include higher interest rates which lead to a reduction in investment and borrowing. The fall of real wages, the reduction of consumer confidence, a period of deflation as falling of prices often encourage the mark of spending. b) Comparison to the other two recession The 1979- 1981 reces sion was caused by the following economic factors High susceptibility of the pound (British currency) and this made the price of exports became more expensive thereby having a reduced AD (Aggregate Demand). This recession particularly affected the British manufacturing (Bank of England, 2012). The high interest rate was another factor. The