Revenue, Cost Concepts, and Market Structure Proposal

Running head: Cost Concepts, and Market Structure Proposal 1 Revenue, Cost Concepts, and Market Structure Proposal Melissa Hillyer University of Phoenix Economics 561 Dr. Kocharyan June 30, 2010 Revenue, Cost Concepts, and Market Structure Proposal 2 Abstract The following paper will analyzes Thomas Money Service scenario data and make recommendations to the company’s increasing revenue. This paper will analyze and determine how to fixed variable cost that should to maximize the profits, achieve ideal productions levels, and identify methods to reduce costs.

Recommendations should involve good decision making skills, planning, teaching, coaching, educating, and analyzing the current products and services can determine the future forecast for Thomas Money Service Inc. In order for Thomas Money Service to obtain their profit maximizing output quantity, the organization must start by recognizing that profit is equal to total revenue minus total cost. Recommendations for Thomas Money Service in a falling economy for organization should be decreasing prices until the economy start moving forward in a positive direction.

We will write a custom essay sample on
Revenue, Cost Concepts, and Market Structure Proposal
or any similar topic only for you
Order now

Other recommendations can include collaborating on the economic problems or conditions and researching a solution to accommodate the customers that surrounds the organization. In today’s struggling and uncertain economy organizations can market their products through marketing such as advertising, Internet, word of mouth, newspapers, radio, and television Finally, attached chart represents variable cost, marginal cost, profit, price and other activities within organization of Thomas Money Service. Revenue, Cost Concepts, and Market Structure Proposal 3 Recommendations for Thomas Money Service Increasing Revenue

Established in 1940 Thomas Money Service Inc is a consumer finance company known for granting small loans for household needs. In addition, the organization expanded their services by issuing business loans, commercial real estate’s loans and business acquisition financing. The first recommendation should involve implementing a plan for the future of Thomas Money Service. “This plan should include products in the organization product line. This plan will include advertising marketing campaigns, along with a timeline. Each product should be assessed and gauged for the amount of income predictability it will bring.

The list should be prioritized and those items with the highest stability should have top priority for implementation” (www. ezinearticles. com). The second recommendation involves in analyzing the current products and services which gives the organization a good idea with a high level of monetary stability. In addition, contract agreements have been known to be a stable income that the organization can rely on for future revenue. The third recommendation includes good decision making skills, time management skills, critical thinking skills, leadership skills, and problem solution skills.

In addition, employees with these skills can make last minute decisions base on the past recommendations with the organization. Furthermore, employees can think outside the box if several employees are validated in the decision making solution. The forth recommendation includes training, educating, and coaching employees about the products and services of Thomas Money Service. Most importantly, hands on training are a practical resource the organization can use to implement goals for the organization Revenue, Cost Concepts, and Market Structure Proposal 4

Moreover, in this economic time Thomas Money Service competes with competitors; however the organization can increase their profits by marginal cost which equals to their marginal revenue. Achieve Idea Production Levels To achieve ideal production levels an individual must “under the field macroeconomics, the production possibly frontier (PPF) represents the point at which an economy is most efficiently producing its goods and services and, therefore, allocating its resources in the best way possible” (www. investopedia). During this time the company or organization must decide hat goods and service they should produce in order to real their goal Determine how the Fixed & Variable Cost should be adjust to Maximize Profits Thomas Money Service should recognize that an increase in the fixed variable cost may wipe out potential growth or profits for the organization; however, this doesn’t alter the point that those profits has been maximize. “Variable costs are those cost that change with the level of output. They include payments for materials, fuel, power, transportation services, most labor, and similar variable resources” (McConnell, p. , 2009). During this time when the production begins variable cost can increase by decreasing amount. “Variable costs can be controlled or altered in the short run by changing production levels. Fixed costs are beyond the business manager’s current control incurred in the short run and must be paid regardless of the outcome” (McConnell, p. 9, 2009). Revenue, Cost Concepts, and Market Structure Proposal 5 Thomas Money Service can maximize their profits by choosing to supply the level of output to their marginal revenue which equals to its marginal cost.

However, when the marginal revenue exceeds the marginal cost the organization can earn profits by increasing its output. But at the same time, if the marginal revenue is below Thomas Money Service can lose revenue; therefore, the organization must reduce its output. Below is a chart which indicates the variable cost which can change the output within the Thomas Money Service. OUTPUT | PRICE| MR | TR| TC| FC| VC| MC | AFC| AVC| PROFIT| |  |  |  |  |  |  |  |  |  |  |  | | 0|  |  |  |  | $990. 00 |  |  |  |  |  | | 1| $2,600. 00 | $2,600. 00 | $2,600. 00 | $1,050. 00 | $990. 00 | $60. 0 | $60. 00 | $990. 00 | $60. 00 | $1,550. 00 | | 2| $2,500. 00 | $2,400. 00 | $5,000. 00 | $1,100. 00 | $990. 00 | $110. 00 | $50. 00 | $495. 00 | $55. 00 | $3,900. 00 | | 3| $2,400. 00 | $2,200. 00 | $7,200. 00 | $1,145. 00 | $990. 00 | $155. 00 | $45. 00 | $330. 00 | $51. 70 | $6,055. 00 | | 4| $2,300. 00 | $2,000. 00 | $9,200. 00 | $1,200. 00 | $990. 00 | $210. 00 | $55. 00 | $247. 50 | $52. 50 | $8,000. 00 | | 5| $2,200. 00 | $1,800. 00 | $11,000. 00 | $1,262. 00 | $990. 00 | $272. 00 | $62. 00 | $198. 00 | $54. 40 | $9,738. 00 | | 6| $2,100. 00 | $1,600. 00 | $12,600. 00 | 1,335. 00 | $990. 00 | $345. 00 | $73. 00 | $165. 00 | $57. 50 | $11,265. 00 | | 7| $2,000. 00 | $1,400. 00 | $14,000. 00 | $1,423. 00 | $990. 00 | $433. 00 | $88. 00 | $141. 40 | $61. 90 | $12,577. 00 | | 8| $1,900. 00 | $1,200. 00 | $15,200. 00 | $1,517. 00 | $990. 00 | $527. 00 | $94. 00 | $123. 80 | $65. 90 | $13,683. 00 | | 9| $1,800. 00 | $1,000. 00 | $16,200. 00 | $1,637. 00 | $990. 00 | $647. 00 | $120. 00 | $110. 00 | $71. 90 | $14,563. 00 | | 10| $1,700. 00 | $800. 00 | $17,000. 00 | $1,772. 00 | $990. 00 | $782. 00 | $135. 00 | $99. 00 | $78. 20 | $15,228. 00 | | 11| $1,600. 0 | $600. 00 | $17,600. 00 | $1,917. 00 | $990. 00 | $927. 00 | $145. 00 | $90. 00 | $84. 30 | $15,683. 00 | | 12| $1,500. 00 | $400. 00 | $18,000. 00 | $2,091. 00 | $990. 00 | $1,101. 00 | $174. 00 | $82. 50 | $91. 80 | $15,909. 00 | | 13| $1,400. 00 | $200. 00 | $18,200. 00 | $2,291. 00 | $990. 00 | $1,301. 00 | $200. 00 | $76. 15 | $176. 23 | $15,909. 00 | | 14| $1,300. 00 | $0. 00 | $18,200. 00 | $2,491. 00 | $990. 00 | $1,501. 00 | $200. 00 | $70. 71 | $177. 93 | $15,709. 00 | | 15| $1,200. 00 | ($200. 00)| $18,000. 00 | $2,691. 00 | $990. 00 | $1,701. 00 | $200. 00 | $66. 0 | $179. 40 | $15,309. 00 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TR-TC = Profit| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenue, Cost Concepts, and Market Structure Proposal 6 Describe the Process to make Recommendations. The process of making a recommendation includes coming up with a solid plan and stick by that plan. This includes making setting rules and regulations within the organization so the organization can be successful in the future. Recommendations can include communicating with all employees involved in the project or plan.

This also includes educating, training, and coaching all employees to make sure they have a clear understanding about the project or plan. Economic Concepts to Support Recommendation In the uncertainty Thomas Money Service must develop a plan which the organization can deal with in the struggling economy. Moreover, economic concepts include unemployment, growth, inflation, macroeconomic issues, and supply and demand and the list goes on. Recommendations for Thomas Money Service can include good decision making skills, communication and leadership skills will help this organization through hard times in the economy.

Conclusion In today’s economy times Thomas Money Service has proved that the organization can grow into a successful organization. Moreover, unemployment and uncertainty surrounds the organization but hard work and determination has proved the organization can help people who are in need of their products and services. References: McConnell, C. R. ,Brue, S. L. , & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed. ). New York: McGraw-Hill Irwin www. investopedia www. ezinearticles. com

×

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out