20_ProfitMaximization_ToPost

20_ProfitMaximization_ToPost - “Do what you love but be...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: “Do what you love, but be damned sure it’s profitable. If you do work you love, but it doesn’t generate income, your business will fail. If you do work you hate, but it generates income, your health will fail…and your business along with it. If you can’t do what you love and make it profitable, you’ve either got a hobby or a headache, not a sustainable business. Don’t settle for anything less than passion and profit.” –Steve Pavlina ECON 410 Profit-Maximization 2 eRecitation Class 20 - Profit Maximization 3 Class 20 - Profit Maximization 4 Class 20 - Profit Maximization 5 Class 20 - Profit Maximization 6 Class 20 - Profit Maximization 7 Class 20 - Profit Maximization Sus tainab le Indus try Profits Power of Input Suppliers • Supplier Concentration • Price/Productivity of Alternative Inputs • Relationship-Specific Investments • Supplier Switching Costs • Government Restraints Power of Buyers • Buyer Concentration • Price/Value of Substitute Products or Services • Relationship-Specific Investments • Customer Switching Costs • Government Restraints Entry • Entry Costs • Speed of Adjustment • Sunk Costs • Economies of Scale • Network Effects • Reputation • Switching Costs • Government Restraints Subs titutes & Complements • Price/Value of Surrogate Products or Services • Price/Value of Complementary Products or Services • Network Effects • Government Restraints Indus try Rivalry • Switching Costs • Timing of Decisions • Information • Government Restraints • Concentration • Price, Quantity, Quality, or Service Competition • Degree of Differentiation Cons umer Problem Cons umer Problem Producer Problem Sus tainab le Indus try Profits 8 Consumer Problem Producer Problem Decis ion-Maker: An Individual Decis ion-Maker: A Firm Preferences : Things Preferences : Profits Enjoyment: From Consuming Things Enjoyment: From Selling Things for Profit Bas is for Preferences : Willy-Nilly Bas is for Preferences : Technology, Engineering, Processes, etc. Class 20 - Profit Maximization 9 Class 20 - Profit Maximization 10 Class 20 - Profit Maximization Baseline Monopolistically Competitive Model Our Baseline Monopolistically Competitive Model (BMC) is a model of firm profit-maximizing behavior in which the following assumptions hold: 1. Consumers purchase goods according to their demand functions. 2. A firm cost-minimizes by selecting inputs according to its factor demand functions. 3. Firms select quantity (or price) to maximize their profits, where profit, , is measured as Total Revenues – Total Cost....
View Full Document

{[ snackBarMessage ]}

Page1 / 47

20_ProfitMaximization_ToPost - “Do what you love but be...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online