A single economic concept Essay Example | Topics and Well Written Essays - 500 words

A single economic concept - Essay Example The process aims at identifying the costs that the company can reduce in the long run or ways that the company can increase its revenues in the long run which can marginally increase the element of profit for it for a given level of output or even by increasing the level of output. (Investorwords) Whichever cost is sustained by a company can be grouped into two categories which are variable costs and fixed costs. Variable costs change with the increase in the output while the fixed costs are sustained by the entity stay the same whatever be the output, which also includes zero output. When the company has attained the point where its total costs have equaled the total revenue, it has reached the point of break even and each additional product of the company will generate pure profit for which only the variable costs will be charged and the fixed cost will be spared as the breakeven has already covered them so an increase in the level of output can aid in the profitability of the company with greater margin of profit. For each unit sold or service offered, the marginal profit of the company is the difference of the revenue and the cost of that particular product. If the revenue for a unit of product is greater than the unit cost of that product then the profit for the unit is positive and vice

Principles of Economics Assignment Example | Topics and Well Written Essays - 1000 words - 4

Principles of Economics - Assignment Example The problem of alcohol abuse is not easily overcome because alcohol is highly addictive. In this case, if the alcohol abuser is an economist, he or she will consider many things that he or she would use to help him or her overcome the situation. They will look at the opportunity cost whereby they will consider buying those goods that are best for their health such as food other than alcohol that would cause a problem to his or her health (Mantzavinos 64). Additionally, they will use cost benefit analysis by viewing the benefits accrued from stopping the habit of alcohol consumption. In this case, the benefit of stopping consuming alcohol is higher than continuing with the habit (Porter 1998). For instance, there is wastage of money in purchasing alcohol. They would rather use the same money can be used to buy other important things. More so, they will consider rational behavior by assuming actions that are necessary when they stop consuming alcohol. Further, an economist would look at the market forces of demand and supply of alcohol in that they will analyze the level at which alcohol is supplied to the market and the price that alcohol come with. When the supply is not sufficient, they would prefer to stop drinking alcohol rather than continuing with the habit of looking for a commodity that is scarce and costly. More so, they will consider the level at which alcohol is demanded; therefore, they will analyze the possible outcomes o f many people drinking alcohol. The possible way to help alcohol abuser is to assist them to realize that they have alcohol consumption problem. Friends and family members can help make the abuser realize that alcohol drinking is affecting them in that they strained economically because the money that can be used to purchase basic commodity is used to buy alcohol. The abuser should be willing to look for assistance given that consumption of alcohol is dangerous to an individual’s health.