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Profitability and Marginal costs

Profitability and Marginal costs

Assessment

Presentation

Business, Education

12th Grade

Practice Problem

Hard

Created by

Leonel Barreno

Used 9+ times

FREE Resource

4 Slides • 3 Questions

1

Profitability and Marginal costs

How do they work in an enterprise?

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2

What is Profitability?

Profitability is a measurement of efficiency – and ultimately its success or failure. A further definition of profitability is a business's ability to produce a return on an investment based on its resources in comparison with an alternative investment.

3

What determines an enterprise's profitability?

  • Your profitability in business is your revenue from operations, less your expenses. The greater the result, the more profitable you are.

  • Competition: The less competition the better.

  • Demand: The higher demand for your products/service the better.

  • Size: The size matters. A bigger company produces more.

  • Productivity: Increasing your manufacturing. Being efficient and effective.

  • Advertising: It can boost sales.

  • Overhead: General expenses.

4

What is a marginal cost?

The marginal cost is the cost of producing one more unit of a good. Marginal cost includes all of the costs that vary with the level of production. For example, if a company needs to build a new factory in order to produce more goods, the cost of building the factory is a marginal cost.

5

Multiple Choice

What does Profitability mean?

1

Revenue generated from business activities, less your expenses.

2

Revenue generated from business activities.

3

Cost production

4

Direct expenses

6

Multiple Select

What determines a company's profitability? Pick all the correct answers.

1

Competition, demand, advertising

2

Size, productivity, overhead

3

Demand, supply, marginal costs

4

overhead, direct expenses, supply

7

Multiple Choice

What is a marginal cost?

1

It refers to the the cost of production

2

It refers to the increase in the cost of producing one more unit or serving one more customer

3

It refers to decrease in the cost of producing one more unit or serving one more customer

Profitability and Marginal costs

How do they work in an enterprise?

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