Marginal product formula5/24/2023 ![]() It is his or her responsibility to consider these important issues.Įven though the goal of increasing profit may be the primary criterion for these decisions, it may not be the only criteria. ![]() ![]() ![]() No one can make these decisions for the manager. The answer to these questions is unique for each business and the manager needs to make these decisions. What is consistent among these questions is the objective of earning a profit or increasing profit, and the need to analyze the business operation. Or more practically, the questions might be "Should I change the way I produce my product to increase profit? Should I use a different quantity of the input to increase profit? Should I use a different input? Should I use a different combination of inputs? Should I try to produce more or less of the product? Should I produce a slightly different product? Should I make a major change by producing an entirely different product, and the list of questions goes on. The questions include " what product should I produce," " how should I produce this product," and "how much should I produce" to maximize profit. Among the many decisions that managers make are questions about producing a good or service to achieve the goal of earning a profit. Management has been described as decision making. Often this goal is stated as wanting to maximize profit or to earn as much profit as possible with the available resources. A common business goal is to earn a profit.
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