Economics : Economics Of Business

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HND Accounting Economics FINAL REPORT: The Economics of Business DUE DATE: 20 May 2015 Catherine Macintosh 11006620 For the attention of Sarah Sutherland Word count: 1,243 (Excluding Acknowledgements, Abstract/Executive Summary, Terms of Reference, References & Appendices TABLE OF CONTENTS Page 1.0 Costs 3 1.1 Total costs 3 1.2 Average costs 3 1.3 Marginal costs 4 2.0 Games Console Market 4 2.1 Oligopoly 4 2.2 Oligopoly market structure 4 2.3 Companies behaviour under oligopoly conditions 5 3.0 An Alternative Market…show more content…
Costs ATC AVC AFC Minimum level Productivity In the short run, the average total cost will decrease initially as Sony begins manufacturing their new controller, due to the modification in the amount of total product increasing for each following unit of variable input. This will continue until reaching the minimum level and will then start to increase. This is due to the modification in the amount of total product decreasing for each following unit of variable input and as the number of employee’s increase the amount of total product for each additional employee will decrease more than the amount of total product for the previous employee. This begins altering the marginal cost so consequently the average variable and total cost. 1.3 Marginal Costs Marginal costs are the amount that the total cost will alter for Sony by manufacturing one additional unit of productivity. Marginal costs are generated by variable costs only. The law of diminishing infers that Sony’s marginal cost will increase as productivity increases. Sony’s increasing

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