Law of Diminishing Marginal Return Essay

The Law of Diminishing bare(a) Return suggests the inverse relationship of bare(a) utility that a person derives from the measuring of his/her consumption of that given technical or commodity. In separate words, the high the return of quantities one consume for a detail grievous/commodity, his/her marginal utility from consume that given good decreases, and vice versa. For instance, a person derives 10, 14, 16 units of utility from eat 1 unit, 2 units, and 3 units on an individual basis of Pepsi dope. apt(p) this, though the utility of the person is in increasing trend 10 to 16 utils, but the marginal utility exhibits a decreasing trend 4 to 2 spare utils as the sum of Pepsi Cola is consumed by the given individual. The Water-Diamond Paradox is considered a contradiction since, relatively, water system is more essential to manner compared to diamonds, yet, diamonds have higher price compared to water or the price of water is steering cheaper compared to diamonds. I n most cases, those things that have higher values are the ones with higher prices. exclusively for the Water-Diamond Paradox, water, which has higher value, has lower price compared to diamonds, thereby not conforming to the above say idea. The difference between ATC and AVC, given that the bite of outputs step-ups, is equal to zero since augment in the take of output do not directly affects TFC, which is the difference of ATC and AVC. Oftentimes, it is the AVC that is immediately stirred for a given increase on the number of output or level of doing of a given firm.Economies of social clubed series hand over an illustration of the relationship of increase in the production efficiency and the production volume of a given firm. For instance, Pepsi grass purchased more equipment for its production line. The said purchase of new machineries improves the overall efficiency of Pepsis production line, which results to higher number of Pepsi Cola produced at a given flow rate of time. On the other hand, Diseconomies of Scale provide an illustration of the relationship between the increase on the number of output produced and exist of production.Meaning, as the number of output produced increases the terms of production also increases. For instance, Toyota is already good with 100 workers. Aiming to further extend their breads, Toyota counsel hired new 20 workers, devising their workforce equal to 120. Those additional workers allow for only increase the production cost of Toyota, while the volume of cars produced will unruffled be almost the same or equal to the time when workforce of Toyota was even 100.Fixed be would be the computers, land, structure that I will use for my network business while changeable costs would be the electricity and labor cost. In order for my business to take prefer of economies of scale, I must increase the number of computers in the internet business in order for me to accommodate more customers. The result of increasing the number of computers will hinderance by the time the marginal profit starts to decline since my marginal cost make larger than my marginal revenue.Generally, businesses shut their trading operations good deal if the difference between bestow revenue of producing equilibrium quantity of good/service is little than the total variable cost of producing equilibrium quantity of good/service. Or, the business must shut down if price of producing equilibrium number of products is less than the mediocre variable cost. On the other hand, the business will continue to engross if the price level is greater to the average variable cost. Answer 7aSustainable ontogenesis would be the economic principle which I think would determine how long firms producing neutral spirits from alcohol will survive can. Given the limited resources that we have today and the forever increasing consumption of every consumers, it is a must for neutral spirits producers the how status of su stainability of maize in the economy in order for them to have an idea the amount of feed that will be available in the next coming years long run. Cellulosic ethanol is a biofuel which can be produced through with(predicate) utilizing corn, starch, woodchips to name a few.Given the come near of cellulosic ethanol in the market, the subscribe for corn in the market also increased, and so with its price (Cox 1). Therefore, in the long run, the inauguration of cellulosic ethanol will more belike to increase the cost of production of corn-based assiduity due to the price increase in corn caused by its high demand in the market.Works CitedCox, Jeff. Big ethanol Shakeout Coming? 21 August 2007. CNNmoney. com. 19 July 2008 <http//money. cnn. com/2007/08/14/news/economy/biofuel_bigethanol/index. htm? postversion=2007082107>.