Microeconomics Phase

Microeconomics Phase

Technological Change

Technological change refers to the formation of new products, improvement in quality and gaining of efficiency for the current products. Highly equipped machines, computers, softwares, lighting and other improved products are included in technological changes. They may decrease the manufacturing cost of the product but increase the economy. Due to globalization knowledge and skills transfers from one country to another. Employees also learn different skills that help them to generate new technological changes and skills are spreading geographically among the people of different countries. The size of companies and mannerism affects the types and amounts of their changes, advancements in technology. (www.economics.rpi.edu).

I can implement few technological changes in my bakery like:

Spiral-Style Mixers

I can buy spiral-style mixers. It makes large number of breads in a short time. Three to four workers work on making pieces of breads so if implementation of spiral style mixers will reduce the labor cost and which will directly affect the production cost.

Ergonomics and Safety

Various design changes in the equipments of bakery may result from safety and ergonomics. Machines turn dough into shaped rolls or loaves making workers more productive.It will speed up the rolling pie crusts and pizza crusts.

New Materials

The use of new materials can improve the freezing cake dough more efficiently. They can be used for a long time and can play an important role to reduced variable cost. We don't have to make cake dough daily basis and can safe wastage.

Logistics and Service

Computers are playing important an important role in every unit of business. The management of Bakery can sales and reconcile them with inventory. With this customers can place their orders by computers. It will reduce the risk of miscommunication between staff and customers. It will directly increase the profit.

Graph the total cost and the average total cost

Marginal Product of Labor

It is the change in total product divided by change in labor.

Quantity of Workers

Quantity of Ovens

Quantity of loaves of Bread Produced (Q)

Cost of Ovens (Total Fixed Cost) TFC

Cost of Workers Per Week (Total variable Cost) TVC

Marginal Product of Labor(MPL)

0

2

0

500

0

50

1

2

50

500

450

75

2

2

125

500

850

85

3

2

210

500

1100

90

4

2

300

500

1300

110

5

2

410

500

1500

140

6

2

550

500

2000

75

7

2

625

500

2500

35

8

2

660

500

3050

40

9

2

700

500

4000

30

10

2

730

5005

4500

50

Average Product of Labor

It the ratio of total product and quantity of labor/workers used.

Quantity of Workers

Quantity of Ovens

Quantity of loaves of Bread Produced (Q)

Cost of Ovens (Total Fixed Cost) TFC

Cost of Workers Per Week (Total variable Cost) TVC

Average Product of Labor(APL)

0

2

0

500

0

_

1

2

50

500

450

50

2

2

125

500

850

62.5

3

2

210

500

1100

70

4

2

300

500

1300

75

5

2

410

500

1500

82

6

2

550

500

2000

91.7

7

2

625

500

2500

89.3

8

2

660

500

3050

82.5

9

2

700

500

4000

77.8

10

2

730

5005

4500

73.0

According to law of diminishing return each additional amount of labor is used to fix the

amount of capital and it ultimately decreases the marginal product of labor.

Short run is the time period in which only variable factors of production can change. This happens because productivity of variable input declines as more is added to fixed unit. The results in an increase in production cost which means producers need to receive a higher price. The connection between higher price and more production is essence of the law of supply.

Marginal costs

The cost incurred in the production of each additional good is termed as marginal cost. Samuelson p. A. (1947).The marginal cost of loaves of Bread produced is mentioned in the ...