MGCR 293 Chapter Notes - Chapter 6: Root Mean Square, Hyperbola, Average Variable Cost

• School: McGill University
• Department: Management Core
• Course: MGCR 293
• Professor: Tariq Nizami

Document Summary

All business decision require a comparison between costs and bene ts. Manager undertake a decision if: marginal revenue > marginal cost. Both long term and short term should be considered. A focus on just on of this component can lead to a catastrophe for the company. + most managerial decision require long term vision. Goals = cost analysis, describes models , create competitive advantage using cost analysis. Opportunity cost: the value of the best alternative forgone, in a situation in which a choice needs to be made between several. Opportunity cost are the revenue forgone if resources (inputs) are not optimally used. Manager want to use resources as ef ciently as possible; managers need to reduce oc. Opportunity cost doctrine: the inputs" values (when used in their most productive way) together with the production costs (the accounting costs of producing a product) determine the economic cost of production.