My opportunity cost of going to college is the variety of opportunities I acquired in my attending college. Some of the possibilities include my career direction, education, socialintegration, and my connections. Furthermore, my opportunity cost of attending this course is ensuring I have enough best alternative; therefore the benefits associated with taking the course becomes a cost due to the fact that I dedicated my time and resources to the pursuing the career and not doing anything else. Individual opportunity cost comes from the skills, perspective, and knowledge I could have acquired if I took a different career. Notably, my particular opportunity cost in pursuing the career is the cost I pay in terms of tuition fees, the time I invest in attending classes and also studying for the course. Again my opportunity cost in pursuing this course is the cost of attending a different course that I couldn’t manage to attend due to the fact am already attending this particular career. This kind of personal opportunity costs would have included the time taken to attend the lectures and to study for the end semester exams.
Generally, the opportunity costs of attending college refer to the money or investment a person would have earned at the period of attending studies. For example, if person forfeited going to college and worked for the four-year college and make $50,000 per year, it translates to an opportunity cost of $200,000 opportunity cost for the four years. Notably, some economists add the cost of tuition to the total opportunity cost. Opportunity cost is a scenario of analyzing and choosing between two options and selecting one as more beneficial than the other. In the case study of college asks a question whether education is worth the huge amount of money required to get it.
The question of whether a manager should raise the cost of products to increase revenue purely relies on the elasticity demand of the product. Typically there are two ways of increasing revenue in the company: sell a product at a higher price or make more sales. Therefore if a firm aims to rapidly raise revenue, it should sell more products at a higher price. However, a manager should understand market dynamics in the sense that a higher price of commodities would lead to low sales mainly if competition is high or substitutes exist in the market. Again, there most likely exist other firms in the market, and this reduces the demand for firm products. Thus each firm encounters specific demand curve in the market for its products. Price of product goes together with the market power of a firm’s product. Every company experiences some form of a demand curve; thus managers should know the demand for their product in the market to enable in fixing price for business success.
Again managers should know whether their customer demand is sensitive or insensitive to price changes. Furthermore, managers should study whether the demand curve is flat or steep, in other words how the shift in price affect the overall output. Managers should set their elasticity of demand to check on the relationship between change in cost and effect on the number of products consumed.
The formula for measuring elasticity demand =percentage change in quantity divided by percentage change in price.
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