Question

Hello I need some assistance with these questions I need not so long answers but not too short please

1. Give some examples of How much decisions.
2. What are the implicit costs of having an Airbnb in your neighborhood?
3. What is marginal analysis?
4. What is marginal cost?
5. Under what conditions do marginal costs increase?

Answer 1

1. Implicit cost of having an Airbnb in your neighborhood

• For its parts, Airbnb argues that it helps to diversify tourism by promoting areas that need visitors the most and reducing overcrowding in tourist hotspots.
• it says the money gained from hosting on its platform delivers economic and social benefit for families, commmunities and government.
• In the decade since it was launched, online home rental platform Airbnb has amassed millions of rooms worldwide. But it has Also found entangled in disputes with authorities from Tokyo to Berlin to San Francisco
• While Airbnb opens up some neighborhood to more tourists, it has sometimes proved unpopular with existing residents.
• Some fear property owners are switching from long-term tenancies to short-term rentals, which can be more lucrative.
• This Thing is changing the sense of the place of the neighborhood. it's changing the feel on it, with almost a revolving door of strangers
• Problems of "over-tourism"
• Problems related to short-term visitors behavior , including throwing loud parties and creating parking congestion.

2. What is Marginal Analysis

• Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.
• Companies use Marginal Analysis as a decision making tool to help them maximize their potential profits.

3. What is Marginal Cost

• In Economics Marginal cost is the change in the total cost when the quantity produced changes by one unit.
• It is the Cost of producing on more unit of a good .
• 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.
• It is calculated by taking the total change in the cost of producing more goods and dividing that by the change in the number of goods produced.

4. Under What Conditions do Marginal Costs Increase

• The amount of Marginal cost varies according to the volume of the good being produced.
• Economic factors that impact the marginal cost include information asymmetries, positive and negative externalities, transaction costs and price discrimination.
• Marginal Cost is not related to fixed costs.
• Marginal cost is the increase in cost caused by producing one more unit of the good.
• The Marginal cost curve is U shaped because initially when a firm increases outputs. total costs, as well as variable costs, start to increase at a diminishing rate.. Then as output rises, the Marginal Cost increases.