3 Article Marketing Tips That Should Not Go Overlooked

Luckily for those of us struggling to attract traffic to our content, there are various proven article marketing tips that can help. As most of you know, a blog can serve as a powerful base for your online business. Your blog, or business website in some cases, hosts an online library of content related to your business venture. The content contained in your blog is often a major contributing factor to your financial success. 

While your blog serves as the base and end of your sales funnel, it is important to build the rest. In essence, your blog content is worthless without an audience. Without an audience, your blog might as well be a personal diary. If you're in the market for article marketing tips, I'm sure building an online personal diary isn't your aim. There are a number of ways to build a traffic funnel. Various article marketing tips are amongst these methods.


Have You Tried Social Media?

Lead generation serves as the lifeline to all online business ventures. Without leads it is simply impossible to improve and expand your entrepreneurial mission. Pointing out the importance of lead generation is much easier to do than actually generating leads. Or is it?

Now we're getting somewhere. Are you aware that you can actually generate leads by using Facebook. Today, social networking websites serve as incredibly profitable marketing opportunities. These social media platforms are filled to the brim with consumers.

Targeting these websites with massive amounts of traffic is a no brainier for any internet marketer. I challenge you to find a successful business that fails to have a recognizable presence on either Facebook, YouTube or Twitter. In business, it’s always crucial to bring your product or service to the forefront. Like it or not, these highly frequented websites are marketing hotbeds.

How Many Backlinks do You Have?

At this point in your entrepreneurial venture, you’re certainly aware of the value of making the first page of Google search results. If you're business doesn't appear on the initial results page, it's going to prove rather difficult to attract any traffic from that specific keyword search.

Learning to increase your blog's search engine value and validity is definitely one of the most valuable and promising article marketing tips. Blogging on an authority website is an easy way to bolster your blog. These recognized blogging platforms are already highly valued by Google and any content hosted on them inherits similar respect. 

In addition, the value of backlinks should never go overlooked while marketing online. To appear on the first search results page, your articles need a considerable number of backlinks. These backlinks can be created by posting links to your content on websites all over the internet. Luckily, there are a number of useful article marketing tips that help you to do so.

Search Engine Optimization

Using an authority blogging website and creating numerous backlinks are not the only available article marketing tips. Search engine optimization, or SEO, is a format in which your content can be created to maximize its exposure.

By writing your articles within this format and emphasizing targeted keywords, you do some serious work towards appearing on that coveted initial results page. Learning SEO is not only beneficial, but necessary! An article marketing tips blog entry would not be complete without mentioning the famed SEO.

Article Directory: http://www.articledashboard.com/3 Article Marketing Tips That Should Not Go Overlooked

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10 Strategic Reasons Why You Need a Business Management Team

I have watched or listened to several successful entrepreneurs and drop out billionaires being interviewed. I have read several business books and studied the business success strategies of famous entrepreneurs; and they all seem to share one thing in common. They all attribute their rapid business growth to their business management team.
Now why is a business team important to an entrepreneur? Why should I build an in-house business management team when I can always seek external advice? What impact will a business team have on my business? I am running my business on a lean budget; why should I increase my overhead by bringing a business team on board?
These are usually the questions I receive when I discuss the importance of having a business team with my protégés. You may be a small business owner operating a mom and pop shop but I still want you to know that you need a business team. It may not be your short term goal but you need to include it in your long term plan.
"Individuals don't win in business; teams do." - Sam Walton
No successful entrepreneur assembled a business management team in a day; it's a process that can take as long as ten year before the perfect team assembles. Finding the right business team is definitely not an easy task and that's why I listed it among the ten major business challenges entrepreneurs face when starting a business.
Now why do you need a business management team? Well, below are ten strategic reasons why you building a business team should be your long term goal.
Ten Strategic Reasons why You Need a Business Management Team
1. Raising Capital
One of the key reasons why startup entrepreneurs don't get the venture capital is because they are trying to raise capital alone. A business mentor of mine once said that venture capitalist prefer an average product with an excellent business team than an excellent product with an average business team.
If you should consider this statement; you will come to acknowledge that it's the truth in its entirety. A business team is vital to the process of raising capital for your business; in fact, it increases your chances of securing the capital. Show me an entrepreneur that raised billions of dollars in capital and I will show you an entrepreneur backed by a strong business management team. Just like said in the investment world; money always follow management.
2. Taking advantage of new or existing opportunities
Having your own business management team will give you the leverage to take advantage of business opportunities effortlessly. A business team will be your eyes, ears and nose in the business world; they will not only help you sniff out opportunities but will also help you create opportunities out of thin air.
"A business idea is just another idea. But an idea backed by a strong feasibility, a thorough business plan and a smart team is no longer an idea. It's now a solid business opportunity worth pursuing." - Ajaero Tony Martins
3. Strategic business development
Do you want to grow your business from the inside? Do you want to strengthen your bottom line? Then build your own business management team. Strategic business development is not the doing of an individual but a collective effort of a business team. Employee performance programs, staff motivation and operational excellence are part of the duty of a business team.
4. Rapid expansion and growth
Take a close look at companies that grows rapidly and stands strong in times of economic recess and you will find a strong business management team behind such companies. The massive outside expansion of any company is the handiwork of the business team. An entrepreneur visualizes while the business team draws the plan; critique the plan and executes the business plan. For instance, take a look at the rapid acquisition move taken by Oracle Corporation; buying up a total of 57 companies within five years. That's the power of a good management driven company.
5. Business leverage
How is a company able to operate successfully in different sectors of the economy? How can an entrepreneur successfully run a business conglomerate? The answer is leverage.
"Successful businessmen share the ability to hire people smarter than they are." - Dillard Munford
The leverage of a business team is the reason successful entrepreneurs became billionaires effortlessly. Leverage is the reason why entrepreneurs such as J. Paul Getty and Carlos Slim Helu are able to run over 200 companies without burning themselves out. The leverage of a business team is a form of intellectual leverage. Just as a man is known by the friends he keeps; so is a business respected by the management team it keeps.
"People are definitely a company's greatest asset. It doesn't make any difference whether the company's product is cars or cosmetics. A company is only as good as the people it keeps." - Mary Kay Ash
6. Increase confidence of the investors
Just like I stated above; money follows management and who provides the money? The answer is the investors. Nothing inspires or boosts the confidence of an investor than the professionalism of the business management team piloting the affairs of the company he/she invested in.
Have you tried raising capital before? Have you tried sourcing for contracts before? Have you tried sending a business proposal to another company before? Have you ever tried selling a business before? Or better still buying a business? Have you ever taken a company public before?
If you have engaged in any of these acts; you will come to accept the fact that one of the most popular questions investors ask is this:
Who is on your team?
Who on your team has taken a company public before?
Who on your team has experience in business management?
The questions above are real life questions asked by investors because they feel comfortable hearing the fact that the managers of their investments are competent.
7. Increase the entrepreneur's credibility and competence
Observe the words of successful entrepreneurs and drop out billionaires carefully; and you will see that they attribute much of their success to their team. Have you ever wondered why some drop outs end up successful business owners? The reason is because they built their business on the shoulders of intellectual giants; who happen to be members of their business management team.
An entrepreneur can never know it all and that's why he/she relies on the calculative initiative of the business team. Show me an entrepreneur backed by a weak business team and I will show you an incompetent entrepreneur. So if being recognized as an entrepreneur of credibility and competence sounds good enough to be added to your resume; then build your own in-house business management team.
8. Strategic innovative thinking
Innovative companies are usually companies driven by a strong management team. Observe companies such as Microsoft, Apple, Oracle and Sony; and you will come to realize that these companies have being built, driven and sustained competitively on innovation. Now who are the engineers of innovation? It's the business team; the brains behind the company. Tactical approach to issues, detailed competitive analysis and strategic thinking are benefits derived from having your own business team; so would you rather not have one?
9. Critical problem solving
How does a company survives a recession? How does a company survive in a fierce market? The answer still lies in the team. In the previous article I wrote, I highlighted the characteristics of successful business management teams and one of such characteristics is critical problem solving.
Entrepreneurs are known as critical problem solvers but I also want to add that problem solving is a product of collective strategies and ideas put together by a group of individuals; and such individuals in this case is your business team. Critical problem solving is the reason why teams go on brainstorming sessions. Now tell me, how do you create a brainstorming session when you don't have a business team? I leave that for you to answer.
10. Increases the value of the business
Value appreciation is the last but not the least reason why you need a business management team. One of the most important assets of a business is the management team on ground because with a good business management team; every other asset can be synergized into yielding positive results for the company.
The reason why I call a business team your most important asset is because other assets are easy to create or control once the right business team is in place. So instead of focusing of improving your lifestyle; acquiring investments individually or running your business solely, I will advice you first build a business management team and the rest will fall in place.
As a final note, I want you as an entrepreneur to shift your primary aim from acquiring luxuries to building a business team because investment on a team is probably the best investment an organization can make.

 Source : GoArticles.com © 2012, All Rights Reserved/10 Strategic Reasons Why You Need a Business Management Team

Entering the action and Playing BIG! - what's the objective of blogging and site-building

Entering the action and Playing BIG! - what's the objective of blogging and site-building   by Benjamin Rasmussen

in Marketing    (submitted 2012-03-28)

You will find a good number of thoughts out there regarding, "what may be the aim of blogging"? Some are wonderful while some tend to be negative. We have found individuals that have blogging and site-building within a bad light, are the same folks that lack a good knowledge of about what is the aim of blogging?

With this short article, we hope to give clarity for people who misunderstand why so many people are looking towards the on-line world and learning how to blog.

Blogging and site-building is the method of providing user generated content, generated by individuals sharing their views regarding different topics. This is the main reason anybody who chooses to learn how to actually blog, is capable of success and helps us understand a great deal more, what is the aim of writing a blog? Obviously we're all completely different and because we're different, each person's look at a common subject or topic, will be different too.

For example, let's have a look at the question, what is the objective of blogging? Although the objective of your blog will remain similar, each individual can have their own means of describing what's the purpose of writing a blog?

Everyone may use their specific manner of relating to blogging and site-building and why they believe it's wonderful. Some can use stories about their life to describe writing a blog. Others will make use of video or audio they've produced or recorded, that's a representation of themselves. Some will share stories about their success with writing a blog, others their failure in the beginning, how they struggled for years and then identified why and exactly what is the objective of blogging and site-building.

The really cool thing, is that it doesn't matter your knowledge about writing a blog is actually, or if perhaps you've never tried it. Anyone could flip on a pc and write something regarding blogging and site-building and what they write will be unique for them, without having any understanding of exactly what is the purpose of writing a blog?

This is what makes writing a blog fun

What's the objective of writing a blog? If you love playing sports or have got a competitive side in your personality, blogging and site-building may be a way to participate in one of the biggest activities on the earth. Your ultimate goal, for that matter your mission, is to be better at blogging (sharing your view) regarding a certain topic than anyone else.

What is the aim of blogging and site-building? To write interesting content better than anybody else blogging with regards to the exact same thing.

The reason?

Whenever you can write with regards to a matter or subject a lot better than everybody else, and then attach your corresponding with an incredibly profitable product, it can be literally easy to earn income while you sleep.

Here's another response to the question, what is the purpose of blogging and site-building?

To Produce STUPID MONEY When You SLEEP!

That's it!

Imagine awakening one morning once you've been blogging and site-building for a few months, to discover, that although you had been sleeping, the articles you wrote regarding a particular topic were working in your behalf. Your unique user generated content finally captured the crowd you've been writing for, and as it did. you've made money.

What's the aim of writing a blog?

To enable you to money constantly, automatically!

There has to be more in it than that?

Nope, there's not. Although there are some skills you have got to learn and also be proficient at, with just a little persistence and determination, these skills are generally mastered within a relatively brief length of time.

What's the aim of writing a blog? The 15K dissects why people blog and teaches the techniques you will want to attain success. It is definitely a core product being utilized by many successful bloggers. It explains in detail, the secrets of web marketing and writing In addition, it contains over 20 hours of extensive teaching and instruction, produced and given by top affiliate marketers.

The 15K takes years of experience and condenses them into Seven courses, and delivers game changing information that's easily applied using a comprehensive process.

Inside the 15K, a blue print for on-line success is revealed, leaving nothing unturned. You will still want to apply basic skills, listening and reading. Other than that, with the 15K inside your back pocket, you'll be leaps, indeed years ahead of those which don't own it.

Exactly what is the objective of writing a blog? Think about it in this way, the internet is massive, a large sea, with billions of fish within it and you are attempting to become the the one which gets noticed. Without writing a blog, the 15K and also the training it offers, success online would be as difficult as seeking to climb Mt. Everest with nothing but a tent. Impossible.

How do we know it works? Your reading a post we wrote utilizing what it teaches, and it doesn't matter when you're reading it. The point is. you came across it.

Exactly what is the aim of writing a blog?

To permanently post flyers around the world, that are unique to you and will increase your profits for the remainder of your own life.

For your success,

Ben & Annette

PS Get involved, Get moving and Play BIG!

Source:  GoArticles.com © 2012, All Rights Reserved/Entering the action and Playing BIG! - what's the objective of blogging and site-building

Business Ideas & Business Opportunities

Entrepreneurial businesses come in all shapes and sizes. With only a few exceptions, if a big company can do it, so can a small one. Come explore the wide world of possibilities, including retail, direct sales, and a wide range of service businesses. 3. Franchises (13) 4. Home-Based Business (13) 1. Network Marketing & MLM (9) Best Business Ideas You Can Start for Under $20 In tough economic times, not everyone has access to capital to start their business. If you only had $20 to start your own business, what business would you start? And how would you spend the $20? Ads LinkedIn IndonesiaBuild your professional identity Connect with business associates www.linkedin.com Live Out Loud AustraliaGrand Opening Preview Tour, Get A Free Millionaire Makeover by Loral www.liveoutloudaustralia.com.au Facebook AdvertisingReach The Exact Audience You Want With Relevant Targeted Ads. www.facebook.com/Ads Choosing a Business to Start The traditional approach to entrepreneurship is to research the market, identify a need, and create a business to fill it. In recent years, "Do what you love and the money will follow," has become increasingly popular. But there's an approach that combines the best of both. 10 Under $20: Legitimate Businesses You Can Start for $20 Whether you're employed and starting a business on the side, a student or homemaker looking for extra income, or unemployed and exploring your options, there are plenty of opportunities to start a business inexpensively. They may not make you a living right away, but all have the potential to grow into full-time work. Take a look at 10 such... Best Business Opportunities 2005 2004's hot trends become 2005's hot opportunities. If you're thinking about starting a business this year, here are some of the best new business ideas you may want to consider. Create Your Own Summer Job: 6 Ways to Make Money This Summer If you're a recent graduate, a teacher or student off for the summer, or anyone else looking for some quick cash, summer's a great time to start a business. With a little money, some hard work, and a lot of entrepreneurial spirit, you can start turning a profit immediately. And all of these ideas are things you can still walk away from in September if you want to. Top Ten Business Opportunities for 2004 (Small Business) Small Business Guide Darrell Zahorsky takes a look at the top small business opportunities for 2004. This includes some obvious ones, like anything in the organic industry, and some not-so-obvious ones, like hot rod accessories. Springwise Springwise scans the world for new business ideas, concepts, and ventures, and reports on these findings in a free monthly newsletter. This is a great source for truly cutting-edge business ideas. 200 Ways to Start Your Own Business While not expanded on in great detail, if you're just looking for a list of ideas to help you open your mind to the possibilities, this is a great place to start. Information Products are Key to Part-Time Business Success New book explains how to start a part-time business creating information products and selling them online. Ads International franchiseIT & Security education & training Global franchise network from india www.appinonline.com/BusinessOpportunity Individual Business PlansProfessional plans tailored to your high growth business project www.gordonpender.com New Rules of the Road for Entrepreneurial Survival New Rules of the Road for Entrepreneurial Survival More Entrepreneurs Going the Solopreneur Route More entrepreneurs are starting businesses they run themselves, rather than companies that create employment, according to new research from the Kauffman Foundation. Entrepreneurs are Getting in the Driver's Seat with Gourmet Eateries on Wheels A new wave of mobile food truck entrepreneurs is taking hold, enabled by lower startup costs than traditional food retailing and a non-stop appetite for non-boring street food. Healthcare, Green Industries & Tech Lead Way in Growth Sectors Even with the economy still lagging, there are high-growth industries emerging that will attract startups, including opportunities in healthcare, green industries, education, and internet and technology. And many of the growth sectors have niches that don't cost a lot to participate in. Apply now to guide this site Discuss in our forum Advertisement Entrepreneurs Ads * Home Business Ideas * Ideas for a New Business * Making Money Ideas * Small Business * Business Opportunities Ads Tech-Entrepreneur BlogCool stuff about entrepreneurship, innovation, social media and more www.tech-entrepreneur.me Digital Glass PrinterDigital Printing for glass,crystal. Digital print on Mug ,Cup,Crystal www.mugsprinter.com/ Distributors wantedPOTEMA is looking for Distributors maybe in your country too. www.potema.de Source : 2©2011 About.com. All rights reserved. A part of The New York Times Company.

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Don't Fear Failure A bad turn can point you in the right direction. Don't Fear Failure A bad turn can point you in the right direction. BY Robert Kiyosaki | November 14, 2008| 0 inShare0 One of the reasons so many people don't become entrepreneurs is because they're afraid of failing. They're afraid of making mistakes. They're afraid of losing money. But if people can't overcome these psychological fears, they'd be better off keeping their day jobs. In the early 1980s, when my first major business failed, I thought I was the stupidest person in the world. Being flat broke and getting calls from creditors made me wish I had never wanted to be an entrepreneur. I even wanted my old job back. But instead of condemning me for failing, my rich dad gave me one of life's most important lessons: "You're fortunate to have failed. You now have the opportunity to learn how to turn bad luck into good luck. If you can do that, you'll have a life of more and more good luck." Here are three key points for turning bad luck into good luck: 1. Don't blame. When my rich dad asked me what went wrong, the first thing I did was blame my partners and the economy. He immediately said, "Never blame anyone for your failures." "But it was their fault," I replied. Shaking his head, my rich dad said, "If you blame someone else, you'll never learn from your mistake. If you blame, you give your power away." Remember, there are no victims--only volunteers. And you volunteered to become an entrepreneur. 2. Meet new partners. My rich dad said, "In every bad deal, I have always met good people. Some became new partners." Still hating two of my partners, it was hard for me to understand this statement, yet I took my rich dad's advice and began sifting through the wreckage. Today, one of my best friends came from that business fiasco. In the ruins of other business failures, I met my current partner in real estate and another partner in my franchise business. If not for the failures, I wouldn't have met those fellow entrepreneurs and gone on to make millions of dollars with them. 3. Study your mistakes. "Mistakes are priceless," my rich dad told me. "Study them, learn and profit from them." Again, this lesson was hard to hear. Being angry and broke, I wanted to run from my mistakes. But rather than run from my failure, I went back to my factory, studied my mistakes and resurrected the business. This is how I turn bad luck into good luck. Remember, making mistakes and becoming smarter is the job of an entrepreneur; not making mistakes is the job of an employee. Robert Kiyosaki (richdad.com), author of the Rich Dad series of books, is an investor, entrepreneur and educator whose perspectives have changed the way people think about money and investing. Copyright © 2011 Entrepreneur Media, Inc. All rights reserved.

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Margin Keuntungan Sablon Digital 100-900% Untuk peluang usaha di bidang sablon digital atau usaha cetak-cetak produk suvenir / barang promosi ini, selain hanya butuh modal kecil... margin keuntungannya sangat besar Money mouth. Usaha apapun, biasanya usaha yang hanya menjual dalam satu kategori penjualan saja, misalnya hanya Jasa saja, atau hanya Barang saja, harganya gampang di lacak mahal atau tidaknya. Misalnya anda menjual dalam kategori Jasa saja contohnya jasa pengiriman barang, jasa servis handphone, atau sampai jasa narik taksi, semuanya sudah ada perbandingannya dan customer bisa cek2 kiri kanan untuk melabel jasa anda kompetitif atau tidak. Sedangkan untuk barang, wah lebih parah lagi.. Jualan di pusat perbelanjaan apalagi. Misalnya jualan komputer di pusat perbelanjaan komputer terbesar di Jakarta, di Mangga Dua misalnya.. jualan komputer yang harganya 5 jutaan untungnya hanya Rp 100.000-150.000, kadang2 kalau lagi sepi Rp 50.000 aja di ambil untung cuma 1-3%..., habis... daripada daripada ntar di ambil toko sebelah mendingan ambil aja lah daripada ga untung sama sekali.. Padahal tuh jual komputer kan ada garansi... Apalagi jualan barang2 lain yang sudah lebih pasaran.. mana mungkin untung banyak2... Nah Kalau mau jual sesuatu yang orang tidak bisa ukur nilai pastinya atau agak susah dicek kiri kanan harganya adalah bisnis yang menggabungkan Barang dan Jasa!. Misalnya anda menjual lukisan, anda kan menjual lukisan itu (barang) tapi dengan keterampilan anda juga (jasa). Nah kalau anda pelukis handal, harga lukisan anda pasti lebih tinggi daripada pelukis amatir bukan? Nah kalau mau cari peluang usaha itu, harus yang menggabungkan Barang dan Jasa supaya keuntungan bisa jauh lebih besar dan orang tidak bisa membanding2kan dengan orang lain karena keahlian kita pasti berbeda dengan orang lain. Nah usaha di bidang Sablon Digital ini sama dengan kategori Barang dan Jasa itu. Misalnya, kita menjual T-Shirt atau Mug, tapi kan design kita dengan design orang lain berbeda tergantung dari tingkat kreatifitas kita sendiri. Jadi nilainya berbeda2. Anda lebih memilih mana? Beli T-Shirt design amatiran atau T-Shirt dengan design unik dan kreatif? Pasti yang unik dan kreatif itu kan? Nah jadi dalam usaha Sablon Digital ini selain produk2nya sendiri yang sudah unik, kreatifitas anda juga menambah keunikannya lagi, jadi nilai jual akan sangat tinggi. Maka tidak perlu kaget, modal cetak ID Card misalnya hanya 540 rupiah, bisa dijual Rp 5.000-10.000 bahkan ada yang masih menjual ID Card di atas Rp 15.000! Untungnya minimal bisa lebih dari 900%!!! Mana ada bisnis dengan keuntungan segitu dijaman krisis global sekarang ini?!?! Apakah semua produk sablon digital ini bisa menguntungkan margin sebesar 900%? Tentunya tidak semuanya. Tapi rata2 keuntungan yang paling minimal adalah 100%! Jangankan 900%, untung 100% saja usaha apapun sekarang sudah susah! Coba anda perhatikan Tabel dibawah ini Wink free image hosting Mungkin anda akan bilang wah itukan belum perhitungan investasi mesin, belum termasuk ongkos kerja. Coba anda tambahkan 10-20% dari total biaya, total keuntungan tetap berkali2 lipat !!! Untuk bahan2 baku lainnya untung juga hampir sama besarnya, paling minimal 100% seperti misalnya cetak2 T-Shirt karena pasar T-Shirt sudah sangat besar. Tapi kalau anda dapat pesanan T-Shirt, biasanya sangat besar kuantitasnya juga bukan? Jadi sama saja, untung lebih kecil, tapi orderan lebih banyak, totalnya jg besar. Dengan margin keuntungan sebesar itu, ditambah dengan modal yang sangat kecil (mulai dari Rp 2-5 jutaan) apa ada banyak peluang usaha yang lebih menguntungkan dari usaha Sablon Digital? Tunggu apalagi? Mumpung usaha sablon digital ini dihitung masih termasuk baru, nah kalau sudah terlalu lama… yah seperti pepatah, ada gula ada semut, takutnya sumber gulanya sudah habis di kerubutin semut2 semua. Tunggu apa lagi...Kontak Sales Representative kami melalui Yahoo Messenger Smile di : - bluerayshop1@yahoo.com - bluerayshop2@yahoo.com - bluerayshop3@yahoo.com - bluerayshop4@yahoo.com Untuk kembali ke halaman depan, klik disini. Copyright © 2009 bluerayshop.biz

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Perfect Competition 30 27 17 Email 79 Share In competitive markets there are: 1. Many buyers and sellers - individual firms have little effect on the price. 2. Goods offered are very similar - demand is very elastic for individual firms. 3. Firms can freely enter or exit the industry - no substantial barriers to entry. Competitive firms have no market power. Recall that businesses are trying to maximize profits, and Profit = Total Revenue (TR) - Total Cost (TC). Revenue in a Competitive Business Businesses in competitive markets take the market price (P) as given (price takers). How much does the business receive for a typical unit is known as the "average revenue" (AR) and is equal to TR/Q = (P x Q)/Q = Price. So average revenue is equal to price, and is constant. How much additional revenue does the firm get if it sells one additional unit? To answer this question, we take a look at "marginal revenue" (MR) which is equal to the change in TR divided by the change in quantity. Note that this too is equal to price, so the marginal revenue is constant as well, and is equal to average revenue. Profit Maximization To maximize profit, we need to know the revenue and costs of the business. Profit is maximized when marginal revenue = marginal cost, and marginal cost is rising. To see why, recall that marginal revenue is the additional revenue from 1 additional unit. Marginal cost is the additional cost from 1 additional unit. When MR > MC, revenue is increasing faster than costs and the firm should increase production. When MR < MC, revenue from the additional unit is less than additional cost, and the firm should decrease production. As such, A firm maximizes profits when MR = MC. So what happens to output at various prices? Since MC is upward sloping, as price increases, quantity produced will increase too. As price falls, quantity produced falls. In each case, the marginal cost curve determines how much the firm is willing to produce at each price, so it translates into the supply curve. Shutting Down a Company (temporary) A company is considered to have shut down, if it temporary ceases production but keeps fixed capital. A company has exit the industry when it has made a permanent decision to leave the industry. The decision to temporarily shut down a business depends on a few factors. Recall that ATC = AVC + AFC. So average fixed cost is the vertical distance between average variable cost and average total cost. Now if a business shuts down, its total revenue becomes zero, and its total cost equals the fixed cost. So the company should continue producing its product, as long as it covers its variable costs. This way, total revenue is greater than total variable cost, because losses are then less than TFC. Basically, shut down when P (AR = MR) < AVC, to minimize the losses and so the company's short-run supply curve = MC curve above AVC. The firm therefore produces where profit equals marginal cost. Another way to put this is that sunk costs are sunk. Fixed costs are sunk, and therefore cannot be recovered by shutting down in the short run. The decision to continue producing depends on revenues and variable costs. If average revenue is greater than average variable cost, then the business should continue to produce. It is rational to continue producing, so long as AVC < P < ATC. When to Leave An Industry (permanent) A business should leave the industry when revenue is less than cost of operating in the long run. In other words, exit if total revenue is less than total cost (P < ATC). In competitive markets, a company will make zero economic profits in the long run. If companies are making more than zero economic profits, it will encourage other firms to enter the industry to share in these profits. In other words, enter if total revenue is greater than total cost (P > AC). If companies are making zero economic profits, there is no entry and no exit, which is a long run condition. Copyright © 2007-2011 BasicEconomics.info All Rights Reserved.