Profitability and Marginal costs
Presentation
•
Business, Education
•
12th Grade
•
Practice Problem
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Hard
Leonel Barreno
Used 9+ times
FREE Resource
4 Slides • 3 Questions
1
Profitability and Marginal costs
How do they work in an enterprise?
2
What is Profitability?
Profitability is a measurement of efficiency – and ultimately its success or failure. A further definition of profitability is a business's ability to produce a return on an investment based on its resources in comparison with an alternative investment.
3
What determines an enterprise's profitability?
Your profitability in business is your revenue from operations, less your expenses. The greater the result, the more profitable you are.
Competition: The less competition the better.
Demand: The higher demand for your products/service the better.
Size: The size matters. A bigger company produces more.
Productivity: Increasing your manufacturing. Being efficient and effective.
Advertising: It can boost sales.
Overhead: General expenses.
4
What is a marginal cost?
The marginal cost is the cost of producing one more unit of a good. Marginal cost includes all of the costs that vary with the level of production. For example, if a company needs to build a new factory in order to produce more goods, the cost of building the factory is a marginal cost.
5
Multiple Choice
What does Profitability mean?
Revenue generated from business activities, less your expenses.
Revenue generated from business activities.
Cost production
Direct expenses
6
Multiple Select
What determines a company's profitability? Pick all the correct answers.
Competition, demand, advertising
Size, productivity, overhead
Demand, supply, marginal costs
overhead, direct expenses, supply
7
Multiple Choice
What is a marginal cost?
It refers to the the cost of production
It refers to the increase in the cost of producing one more unit or serving one more customer
It refers to decrease in the cost of producing one more unit or serving one more customer
Profitability and Marginal costs
How do they work in an enterprise?
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