Production, Costs and Profits Essay Example | Topics and Well Written Essays - 1000 words

Production, Costs and internet - Essay ExampleHowever, subsequently a certain level of yield the marginal revenue harvest-tide of labor starts diminishing with each additional unit of labor/worker. This means with each additional worker, although the output is increasing, but at a decreasing rate, i.e., negative marginal returns. If this continues, there might come a point at which output actually starts falling with addition of variable factor labor. Under such, if the keen has reached its limit/full capacity, the manager of the restaurant should consider adding a new grill and French youngster machine as adding workers will only add to the costs and will not solve the difficulty (Rittenberg & Tregar consequently, 2009, Chapter 8). Q 2 Marginal Decision Rule The marginal decision rule says that the optimal point is the iodin in which the marginal utility of the next unit is equal to its marginal cost. This rule was applied in this case when deciding how much labor and capital to use. Initially, the industries operating in the maquiladoras were very labor inducing and only about 9% skilled labor was required to operate the existing setup. But then as the patience became more capital intensive, then more skilled labor were required and the helping increased to 12% (Lucinda, 2001). Benefits Although the capital and skilled labor were increasing in the Maquiladoras, but proper raising was being habituated to them so that they can do the work properly and the marginal product rises sooner of declining. Maquiladoras have benefitted US a lot. It has increased the business in the border areas. Moreover, it has created jobs for the people. M whatsoever manufacturers have overly relocated in these areas. Due to this, the areas which were facing double digit unemployment have now generated enough jobs to turn off this unemployment. Moreover, the infrastructure has also developed in the areas where Maquiladoras are located in the US (Lucinda, 2001). Q.3 A g eneric medicine company is one that produces drugs that are identical in essence (not literally) to branded drugs in dosage, strength, quality, intend use and performance characteristics. The chemical formulation is also similar and the name is often kept after the chemical name for market without much advertising. The generic drug industry, though still highly regulated, was given some relaxations under the Drug Competition and Patent Term Restoration Act of 1984 after which the industry boomed. The fact that the generic drug companies do not have to invest much on the explore and development as compared to branded drug companies is the single most important factor for the success of these companies. For any drug company, R & D is a huge investment that it makes in order to keep approach up with new and better drugs for the healthcare industry and forms a significant part of the overall manufacturing and marketing of a particular drug. Thus, the companies that simply take the c hemical formula of branded drugs without investing on R & D themselves save on their costs and are able to sell the drug at a significant discount from the price of an identical branded drug. Thus, a cheaper drug with similar properties will ostensibly sell more. Secondly, with generic drug companies allowed to make identical drugs, the patents are unable to protect branded drug comp