2 essay exam questions Example | Topics and Well Written Essays - 250 words

2 exam questions - Essay Example When this production run is optimized within the current output level, the total average cost per unit produces will decrease based on the simple fact that fixed cost per unit produced decreases as the number of output increases. Investopedia (n.d.) explains that â€Å"the purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale. The calculation is most often used among manufacturers as a means of isolating an optimum production level. The benefit of producing one additional unit and generating revenue from that item will bring the overall cost of producing the product line down. The key to optimizing manufacturing costs is to find that point or level as quickly as possible.† Various reasons can be considered. For a monopolistic business, keeping the product’s presence in the market is necessary while waiting for the product’s improvements or innovations from the Research and Development department. Once these product improvement or innovation is achieved, the turn of events may become more profitable and may even achieve new heights of business success. Product substitutes may have caused the business to deteriorate. But as long as it is evident that product improvements or innovation will turn the tides of business back to original profitable track, it is worth keeping the business going. Otherwise, when there is no more prospects on the business line, continuing operation will just drain resources. (John Wiley & Sons, Inc , n.d.) states that â€Å"if the firms average variable costs are less than its marginal revenue at the profit maximizing level of output, the firm will not shut down in the short-run. The firm is better off continuing its operations because it can cover its variable costs and use any remaining revenues to pay off some of its fixed costs.† Demand curve for IPOD may rise with this increase on income level of young professionals.

The Benetfits of Outsourcing Your Call Center to India Research Paper

The Benetfits of Outsourcing Your Call Center to India - Research Paper Example This has been the principle reason behind the rapidly expanding offshore outsourcing of international trade in a number of service activities which had been considered non tradable even few years back. The popular idea which has emerged in this context is that â€Å"anything that one can send over the wire is up for grabs!† (Rajan & Srivastava, 2007, p.39). The project seeks to identify the typical reasons for outsourcing by organizations. The major emphasis would be on India which has proved to be one of the most popular destinations for outsourcing by US firms. The relative advantages of outsourcing in India, as against nations like China, Europe and Philippines would be explored in the project. Advantages of Outsourcing From the point of view of an economy, global outsourcing from the developed to the develop nations would be inevitable for creating a large number of while collar jobs in the latter. This would be the inescapable outcome of allocation of resources to their m ore productive uses following international trade. This has been the principle motivating reason for outsourcing. ... Thus outsourcing would necessarily mean to bring about benefits to the society even though certain transitional costs would be associated with it (Rajan & Srivastava, 2007, p.40). There has been extensive research works that have indicated that both the developing and the industrialized nations would reap significant gains from the outsourcing of services. This would necessarily lead to efficiency gains for the industrial nations through the opportunity of developing their expertise in areas of their competencies. A per the McKinsey Global Institute (2003), for each US $1 worth of outsourcing, the nation gains $1.12 while the outsourced nation gains approximately $0.33. The above fact reveals the extent of static gains that companies can reap through outsourcing. Most of the multinational organizations have begun to outsource their service activities on a routine basis. This is because it is felt that if they don’t outsource while their competitors continue to do so aggressive ly, they would be losing on the local and global market to the foreign rivals. This would result in stagnating profits which would reduce the rate of creation of capital and investments in domestic technologies. The cost saving advantage from outsourcing has evolved as the most popular source of value to the US organizations in particular (Rajan & Srivastava, 2007, p.40). Global outsourcing has been significantly effective in reaping benefits for the developing nations in the world. This has been possible through the opening up of new exports, employment opportunities, growth in the numerous tradable service activities. While considering a more dynamic picture, the increase in income levels brought about by trade would also lead to the creation of favorable feedback effects for many of the other