This paragraph discusses the features of the functioning of the company in the short term (for more details, see § 7.3.). In the short term, the firm can change the volume of output by changing the volume of variable resources (the number of employees and the volume of processed objects of labor) with a constant volume production capacity(buildings, machines, machine tools, equipment, mechanisms, area of cultivated land), which are related to permanent (fixed) resources.
Total (total) product (total production) (total product ≡ quantity, TP º Q)- the total number of products in physical terms (physical and conventional units of measurement) produced by the company for a certain period of time.
Average product (average productivity) (average product of factor, or average physical product, AR)- the number of products in physical terms (physical and conventional units of measurement) per unit of the variable factor of production for a certain period of time. For the case when the variable factor of production is labor (labour, L; the number of employees employed at the enterprise), this parameter will be called the average labor productivity (AP L) and calculated by the formula: .
Marginal product (marginal productivity) (marginal physical product, or marginal product, MP)- the increase in the output of the total product produced by each additional unit of any variable factor of production (resource) for a certain period of time, with the fixed factors of production unchanged. For the case when the variable factor of production is labor (L; the number of employees employed at the enterprise), this parameter will be called the marginal labor productivity (increase in output due to the use of one more specific worker) (MP L) and calculated by the formula: 
.
In the short run (see § 7.3 about this), a firm can regulate the volume of output only by changing the number of variable factors of production. The cost of producing a product by a given firm depends on the price necessary resources, from technology, which determines the proportions of the use of the necessary resources, and from the volume of output. The dependence of the firm's output in the short run on the volume of variable factors of production used obeys the law of diminishing marginal productivity.
Law of diminishing marginal productivity(the law of diminishing returns, the law of diminishing marginal product, the law of varying proportions). Starting from a certain moment, the successive addition of units of a variable resource (for example, labor) to an unchanged fixed resource (for example, capital or land) gives a decreasing additional, or marginal, product per each subsequent unit of a variable resource over a certain period of time. This law is based on the assumption that all units of a variable resource are qualitatively homogeneous. In a slightly more extended form: law of diminishing marginal productivity- starting from a certain volume of output, in particular, when all equipment is operating at full production capacity and the maximum specialization of labor for this production has been reached, the sequential addition of units of a variable resource (for example, labor) to an unchanged fixed resource (for example, capital or land) gives decreasing additional, or marginal, product per each subsequent unit of a variable resource over a certain period of time.
Conditional example(data are given in Table 7.1). Suppose there is a small workshop with two machines, on which workpieces coming from outside are processed sequentially. The fixed resource in this case will be two machines, and the variable resource will be the number of workers employed in the workshop. As long as there are no workers, the volume of output is zero, and it makes no sense to talk about the values of the average and marginal productivity of a factor of production, in this case, labor. After the appearance of the first worker, who is forced to alternately work on both machines of various profiles and perform all auxiliary and auxiliary work, the output is equal to twenty parts per shift, the values \u200b\u200bof the average and marginal productivity in this case coincide and are equal to twenty parts per worker per shift. While he is working on one machine, the second machine is idle, and when he is busy with auxiliary work, both machines are idle. After the appearance of the second worker, each of them works only on one machine and in fits and starts performs part of the auxiliary work. At the same time, their level of specialization reaches a maximum, there is no need to switch from one type of work on one machine to another type of work on another machine, both machines are idle much less time in the process of performing ancillary auxiliary work by workers, and at the same time, the total output is 50 parts per shift, the marginal productivity of the second worker is 30 parts per shift and is the maximum at this enterprise, the average productivity is 25 parts per shift for each worker. Thus, in our abstract example, with a number of employees of two workers and a total output of 50 parts per shift, a full load is achieved. production equipment and maximum specialization of labor. After that, the change in the volume of output in this workshop, depending on the change in the number of people employed in it, will obey the law of diminishing marginal productivity: the marginal productivity of each subsequent worker, starting from the third, will be less than the marginal productivity of the previous one, while an additional contribution to the increase in the total volume of output the eighth worker is zero, and the arrival of the ninth worker will cause damage to the firm in the form of a decrease in the total volume of output by two parts per shift.
Table 7.1
Numerical data illustrating the law of decreasing
ultimate performance
| The amount of variable resources used - the number of people employed in the workshop | Total production volume (output volume) per shift | The marginal product of labor is the marginal productivity of labor | The average product of labor is the average productivity of labor |
| Conventions and formulas for calculation | |||
| L | TP º Q |  |  |
| Units | |||
| Number of persons | Parts per shift | Details in exchange for a specific person | Parts per shift per employee |
| - Increasing | - | ||
| 20 limit | 20,000 | ||
| 30 recoil | 25,000 | ||
| 24,666 | |||
| 20 Descending | 23,500 | ||
| 16 limit | 22,000 | ||
| 10 recoil | 20,000 | ||
| 18,000 | |||
| 15,750 | |||
| Negative -2 marginal recoil | 13,777 |
a) total production curve (TP º Q):
Total production, TP º Q (parts per shift)
maximum point of the TP curve
Three phases of the TP curve:
I - rise by accelerating dark
II - slowing down
III - decrease in the curve.
0 1 2 3 4 5 6 7 8 9 Work force, L (people)
b) mean curves labor productivity(AP L) and marginal labor productivity (MP L):
Total production, TP ≡ Q (parts per shift)
AR I - section of the increasing limit
performance;
II - section of the decreasing limit
productivity;
III - area of negative pre-
efficient returns
Rice. 7.1. Graphical representation of the law of decreasing limit
performance
When marginal productivity exceeds average productivity (MP > AP), average productivity increases (AP). When marginal productivity is less than average productivity (MP ‹ AP), then average productivity decreases (AP¯). At the point of intersection of the curves of average and marginal productivity, the average productivity reaches its maximum value (Fig. 7.1).
The growth of the volume of production (TR) at an accelerating pace corresponds to the increasing marginal productivity (MP), which is associated with an increase in the marginal return from each subsequent unit of a variable resource due to the most complete and efficient use of the means of production and increased specialization of labor. The growth of output (TP) at a decelerating pace corresponds to diminishing marginal productivity (MP¯), and the decline in output (TP¯) corresponds to negative marginal productivity (-MP), which is due to the law of diminishing marginal productivity.
Economic activity of the company- those actions that it carries out in order to obtain revenue.
Under revenue, we will further understand the total income of the company after the sale of products - that is, the product of the quantity of products sold by its price ( TR=Q*P).
The economic activity of the company can be divided into two types:
We can say that commercial activity is secondary in relation to production, that is, there can be no firms on the market that carry out only commercial activity, because someone else must also produce it.
So, both commercial and production activities are components of the economic activity of the company, the economic activity of the company can be described by the production function:
production function- shows I the dependence of the amount of product that the company can produce on the volume of resource costs. The production function equation can be written as follows:
In the presented formula, the volume of output (maximum at a given cost) is denoted by the letter Q(quantity - from the English quantity, volume), in letters F(factor - factor, English) denotes the various factors of production that the firm uses to maximize output. Letter f(function) shows that the maximum output ( Q) depends on the set (n) of production factors F.
The production function was proposed in 1890 by the English mathematician A. Berry, who helped A. Marshall (English neoclassicist, 1842-1924) in the preparation of a mathematical application to his fundamental work “Principles of economic which is the concept of utility) and production theory (the main concept is productivity ).
In a simplified form, the production function can be represented as an output dependence ( Q), which is primarily determined by the amount of invested capital ( capital, K) and the size of the applied labor (labor, L). Then the equation of the production function will take the form:
The factors of production that we consider in the production function of the firm can be both variable and constant. What does it mean?
|
FACTORS OF PRODUCTION |
|
|
variables |
permanent |
|
Their costs depend on the size product release. That is, if the firm wants to increase output, then it should increase the amount of the variable factor. |
Their costs do not depend on output size (up to a certain point) |
|
You can change their size in the short term (number of employees - labor, raw materials, etc.) |
It is impossible to change their value in the short term (the size of a plot of land, the size of a plant, technologies, etc.) |
Now we will depict the main functions of the company in the diagram:
If the Austrian neoclassicists developed the theory of marginal utility, then the American neoclassicist John Bates Clark (1847-1938) proposed the theory of the marginal productivity of labor and capital. Clark believed that the central place in economic theory occupies the problem of distribution of the social product. This distribution is made in accordance with the share of participation of each of the main factors of production (labor, capital and land) in the creation of the product. The income of entrepreneurs and employees, according to Clark's theory, should correspond to the real contribution of capital and labor to the final product of production (output).
Performance(or total productivity) of each of the factors of production is determined; how many units of output are produced per unit of factor used.
For example, labor productivity is calculated as follows: the number of products produced is divided by the number of workers whose labor was involved in the production of these products. The greater the result of this ratio, the higher labor productivity.
What about the marginal productivity in this case?
Let the farmer own a plot of land of 1 hectare. Each additional amount of potatoes grown in this area requires additional labor costs. Then what will be the productivity of each next unit of labor applied to the land?
Ultimate performance(MRP) of a factor of production is the increase in output that is caused by the use of an additional unit of this factor.
It can be assumed that at first the marginal productivity of labor will increase (two people will be able to produce not twice as many potatoes as one, but even more), at a certain moment the marginal productivity will begin to decrease (i.e. the eleventh person will increase the total number of potatoes harvested less than than the tenth, etc.).
What is the reason for this situation? In our example, one of the factors of production (land) acted as a constant, and the other (labor) - as a variable. Accordingly, if the value of the variable factor increases (one person, two people, three, ten, eleven), and the size of the land plot does not change, then marginal productivity from a certain moment (for example, from the start of the work of the eleventh worker) begins to decrease. This is the meaning of the law of marginal productivity:
If one of the factors of production is variable, while the others are constant, then, starting from a certain moment, the marginal productivity of each subsequent unit of the variable factor decreases.
Law of diminishing productivity plays the same role in the theory of the firm as the assumption of diminishing marginal utility in the theory of consumption. The assumption of diminishing marginal utility makes it possible to explain the behavior of a consumer who maximizes total utility, and thereby determine the nature of the demand function of price. In the same way, the law of diminishing productivity underlies the explanation of the profit-maximizing behavior of the producer.
The manufacturer has certain production equipment located in a limited area occupied by the enterprise. He faces the key question of production: how much should be produced? What is this best release (Q)? After all, output can be increased or decreased by hiring more or fewer workers, processing more or less raw materials, and so on. And how to respond to a change (for example, an increase) in the price of a commodity - to rush to increase the scale of production? This is where the law of diminishing productivity comes into play. Consider the stages of production and the impact of the law of diminishing productivity on the example of a firm.
Suppose there is a firm that uses one variable factor of production (eg labor). All other factors of production of this firm are constant, that is, one factor of production, for example, F1 varies depending on the size of the output, and all other factors (F2, F3...Fn) remain unchanged (const).
How is the influence of the variable factor of production on production and output reflected? Consider this influence, taking into account the following classification of products, that is, products from the point of view of the manufacturer (firm).
Profit is the difference between the revenue from a product and the cost of producing that product. What makes up the profit, how it is distributed, etc. - we will consider in the lesson "Profit of the company."
Distinguish:
|
total product (total product, TR) |
The total amount of an economic good that is produced using a variable factor of production |
|
Average product (average product, AR) |
The value that can be obtained by dividing the total product by the amount of the variable factor (AR): |
|
marginal product (marginal product, MP) |
An increase (increase) in the total product caused by an increase (increase) in the use of a variable factor of production by unit (MP): |
The total product increases with the growth of the use of the variable factor, but the growth of the total product has technological limitations. That is, the possibilities of production (achieving the best result) are limited by the technologies that it uses in production. In total, 4 stages of production are distinguished (provided that the production function will look like: Q = f (L, K)). Let us first consider how the total product graph changes ( TR) depending on changes in the values of the average and marginal products:
1 stage: labor costs increase, capital is used in a larger volume, marginal and average product increase, and:
Total product (TP) grows more slowly than the amount of variable factor used.
2 stage: marginal product decreases and MP = AP
The total product (TR) is growing faster than the amount of the variable factor.
3 stage: marginal product continues to fall
The total product (TR) grows more slowly than the amount of the variable factor.
4 stage: marginal product is negative
An increase in the variable factor leads to a decrease in the output of the total product.
Based on the above graphs, you can evaluate and understand when it is necessary to stop increasing the variable factor in production. The total product reaches its maximum at the point where the marginal product is zero, that is, after point 3, the marginal product will begin to take negative values. And this means that it becomes unprofitable for the manufacturer with these technologies and the size of production to continue to increase the variable factor.
The law of marginal productivity was derived not theoretically, but experimentally. 19th century economists limited the scope of the law of diminishing productivity to agriculture, not extending it to other branches of production. The limited nature of the permanent factor of land production, the relatively low rates of technical progress compared to other sectors, the relatively stable range of crops grown - all these circumstances led to the visibility of the law in question in agricultural production. But already at the end of the 19th - beginning of the 20th century. scientists have come to understand the universality of this law. Indeed, after all, in an industrial enterprise there are always constant factors of production. This is both the equipment available and the occupied territory. In a short period, when the technological process remains unchanged, and the quantity of at least one factor of production is fixed, a moment inevitably comes when each next unit of the variable factor used will cause a smaller increase in output than the previous one. True, in the long run, when the producer has the opportunity to change technologies and the size of production, the total product curve shifts upwards, which means that it becomes possible to use a larger amount of the variable factor with a positive result.
Market mechanism
Market mechanism- this is a mechanism of interconnection and interaction of the main elements of the market: demand, supply, price, competition and the basic economic laws of the market.
The market mechanism operates on the basis of economic laws: changes in demand, changes in supply, equilibrium price, competition, cost, utility and profit.
The main current goals in the market are supply and demand, their interaction determines what and how much to produce and at what price to sell.
Prices are essential tool market, as they provide its participants with the necessary information, on the basis of which a decision is made to increase or decrease the production of a particular product. In accordance with this information, there is a movement of capital and labor flows from one industry to another.
6) State regulation of the market is active intervention government agencies into the structure of the functioning of the market, influencing the development of production in a socially necessary direction, as well as to solve emerging social problems. Need this moment occurs when the imperfection of individual markets, which manifests itself in instability, partial accounting of costs and results obtained, not the uniqueness of equilibrium. Another important reason state regulation market is the need to solve macroeconomic problems. These include:
Ensuring full employment of the able-bodied population;
Fight against inflation;
Combining the principles of social justice and economic efficiency and others.
State regulation of the market sets the following goals: Stabilization market relations, the establishment of their equilibrium or a shift aimed at their equilibrium or deviation.
Methods of state regulation, with the help of which the above goals are achieved:
By controlling production volumes and price levels - in this case, the state sets specific prices or introduces market quotas;
Through the use of public financial instruments - expressed in the introduction of taxes and subsidies for certain areas of activity;
By setting fixed prices.
Introduction of a tax on a specific area production activities causes an active growth in proposals, where the cost of the tax is paid into the state budget by sellers from the funds of buyers who purchase goods. The subsidy represents the reverse side of the tax, which is set as a certain percentage of the cost of goods or in an amount (calculated in rubles) per unit of goods. Grants are most often received by producers, although there is a real possibility of obtaining a private person. Fixed prices are set for agricultural products, exceeding the equilibrium price level. Thus, the methods make it possible to regulate prices in the markets by the state.
8)
The ordinal theory of utility is based on the assumption that people, although they cannot give an exact quantitative expression of the utility of goods, can always rank goods according to the degree of utility. On this basis, it becomes possible to explain the choice of the consumer without resorting to calculating the absolute value of the utility of the good. The utility set function is a map of indifference curves.
indifference curve- the line on which all sets of goods are located that have the same utility for the consumer, that is, x1y1 is equal in utility to the set x2y2.
The indifference curve is arranged according to the degree of increase in utility: the higher, the greater the utility.
An indifference curve map graphically represents a utility function for a given consumer.
The indifference curve map is built on the basis of the following assumptions about consumer behavior:
1. Consumer preferences are formed.
2. Consumer preferences are transitive: A is greater than B, B is greater than C, A is greater than C.
3. Needs are not completely satisfied, that is, the consumer will always prefer a set with a large amount of at least one product: y2x3 is more than y2x2.
4. Goods included in the consumer basket are interchangeable.
5. A set of goods on the same indifference curve gives the same utility, and the consumer does not care which set to use. He is always ready to replace a certain amount of one good with a certain amount of another good.
Indifference curves reveal consumer preferences. However, they do not take into account the constraints of the consumer - the price of goods and income.
9) Marginal rate of substitution (MRS) the product of the product shows the amount of the product that the consumer is willing to sacrifice, for the sake of acquiring one additional unit of the product, while maintaining the overall level of satisfaction unchanged.
MRS = ∆Q 2 / ∆Q 1
Ordinal Theory: Consumer Equilibrium Condition
The ordinal theory of marginal utility is a later development of two economists V. Pareto and J. Hicks.
According to this direction, the theory of marginal utility:
1. Marginal utility is immeasurable
2. The subject does not measure the utility of individual goods, but the utility of sets of goods
3. The subject is able to measure only the order of preference of sets of goods
4. All sets of goods can be grouped by distributing them into sets based on the marginal utility of the goods included in these sets
5. Graphically, a set of options that have equal marginal utility is depicted as a set of indifference curves
6. The utility function is replaced by index functions
7. The theory of marginal utility appears as a whole as a model of indifference curves.
It is the second direction of the theory of marginal utility that forms the foundation of consumer behavior.
10) In the short run, a firm can change the volume of only some resources to increase production, while others are fixed. This feature determines the difference between the production function and short-term costs. The short-term production function has the form: It provides information on the contribution of each unit of the variable factor to the growth of the total output, allows you to determine what costs of the variable factor can achieve the maximum output for a certain period of time, taking into account operation of the law of diminishing returns. The contribution of the variable factor to manufacturing process calculated in terms of total, average and marginal product in physical units. The total physical product or the total productivity of the variable factor is the total amount of output produced by all units of the variable factor under conditions of invariance of other factors. The marginal physical product or marginal productivity of the variable factor is the increase in the total product, or an additional product obtained from the use of an additional unit of a variable factor:. The average physical product or the average productivity of a variable factor is the amount of output produced per unit cost of a variable factor:. Suppose that a company increases production by increasing only the amount of labor that is the only variable factor, with constant amounts of capital (Fig. 7.1). If the quantity of the variable factor is zero, then the output is also zero. As everyone gets involved in production more of workers, the total output grows and reaches a maximum value (120 units) when the firm employs 9 workers, and then, when a tenth worker is hired, the total output begins to decline. An additional worker no longer adds production and even slows down production.
Ultimate performance factor of production
MARGINAL PRODUCTIVITY OF A FACTOR OF PRODUCTION- contribution of production factor a, equal to the change in income from production product when adding or subtracting a unit of this factor, if the quantities of other factors remain unchanged. Author of the theory of marginal productivity J. B. Clark made the assumption that the distribution of income between factors (more precisely, between their owners) in accordance with the marginal productivity of factors meets the requirements of social justice.
position producer equilibrium
Рк dL
11 ) isoquant(constant product curve) - a curve representing an infinite number of combinations of factors of production that provide the same output.
Marginal rate of technical substitution or technological replacement (MRTS)- the amount of one resource that can be reduced in exchange for a unit of another resource while maintaining the same total output.
position producer equilibrium is achieved when the marginal rate of technological substitution of factors of production is equal to the ratio of prices for these factors. Algebraically, this can be expressed as follows:
Рк dL
where Pj Р/г - prices for labor and capital; dK, dL - change in the amount of capital and labor; MRTS is the marginal rate of technological substitution.
2. manufacturer's balance
14) Production costs- costs associated with the production of goods. in accounting and statistical reporting reflected in the form of cost. Includes: material costs, labor costs, interest on loans.
Economic (imputed) costs are economic costs incurred, according to the entrepreneur, by him in the production process. They include:
1) resources acquired by the firm;
2) the internal resources of the firm, not included in the market turnover
3) normal profit, considered by the entrepreneur as compensation for risk in business.
It is the economic costs that the entrepreneur makes it his duty to reimburse primarily through the price, and if he fails, he is forced to leave the market for another area of activity.
Accounting costs - cash costs, payments made by the firm for the purpose of acquiring the necessary factors of production on the side. Accounting costs are always less than economic ones, since they take into account only the real costs of acquiring resources from external suppliers, legally formalized, existing in an explicit form, which is the basis for accounting.
Accounting costs include direct and indirect costs. The first ones consist of expenses directly for production, and the second ones include costs without which the company cannot work normally: overhead costs, depreciation, interest payments to banks, etc.
The difference between economic and accounting costs is the opportunity cost.
Fixed costs are the costs that a firm incurs regardless of the volume of its production activities. These include: rent for premises, equipment costs, depreciation, property taxes, loans, remuneration of managerial and administrative apparatus.
Variable costs are the costs of the firm that depend on the amount of production. These include: the cost of raw materials, advertising, payment of employees, transport services, value added tax, etc. With the expansion of production variable costs increase, and when reduced, decrease.
The division of costs into fixed and variable is conditional and acceptable only for a short period during which a number of production factors remain unchanged. In the long run, all costs become variable.
Gross costs are the sum of fixed and variable costs. They represent the cash costs of the firm for the production of products. The relationship and interdependence of fixed and variable costs as part of the general can be expressed mathematically (formula 18.2) and graphically (Fig. 18.2).
TC–VC=FC, (18.2)
where FC - fixed costs; VC - variable costs; TC is the total cost.
Average costs. Average cost is the gross cost per unit of output.
Average costs can be calculated at the level of both fixed and variable costs, so all three types of average costs are called the family of average costs.
where ATC - average total costs; AFC - average fixed costs; AVC - average variable costs; Q is the number of products produced.
With them, you can make the same transformations as with constants and variables:
AFC=ATC-AVC;
AVC=ATC-AFC.
The relationship of average costs can be depicted on the graph (Fig. 18.3).
Costs in the long run. In a market economy, firms seek to develop a strategy for their development, which cannot be implemented without increasing production capacity and technical improvement of production. These processes take a long period, which leads to discreteness (discontinuity) of the state of the company for short periods.
Average costs in the long run
ATC - average total costs; ATCj-ATCV - average costs; LATC is the long-term (resulting) curve of average total costs.
The line of intersection of the ATC curves, projected onto the horizontal axis of the graph, shows at what volumes of production it is necessary to change the size of the enterprise in order to guarantee a further reduction in unit costs, and the point M shows the best volume of production for the entire long period. The LATC curve is also often referred to in educational literature as a choice curve, or a wrapping curve.
The arcuateness of LATC is associated with both positive and negative economies of scale. Up to point M, the effect is positive, and then it is negative. The scale effect does not always immediately change its sign: between the positive and negative periods, there may be a zone of constant returns from the growth in the size of production, where the ATC will be unchanged.
15) There are types of competition (perfect and imperfect):
Perfect Competition(olipoly) - a state of the market in which there are many producers and consumers that do not affect the market price. This means that the demand for products does not decrease as sales increase.
Main advantages perfect competition :
1) Allows you to achieve compliance with the economic interests of producers and consumers through a balanced supply and demand, through the achievement of an equilibrium price and equilibrium volume.
1) Provides efficient allocation of limited resources due to the information embedded in the price;
2) Orients the manufacturer to the consumer, that is, to achieve the main goal, to meet the various economic needs of a person.
Thus, with such competition, an optimal, competitive state of the market is achieved, in which there is no profit and no loss.
Disadvantages of perfect competition:
1) there is equality of opportunity, but at the same time the inequality of the result is preserved.
2) benefits that cannot be divided and evaluated individually are not produced under conditions of perfect competition.
3) different tastes of consumers are not taken into account.
Perfect market competition is the simplest market situation that allows you to understand how the market mechanism really works, but in reality it is rare.
Imperfect Competition- this is competition in which producers (consumers) influence the price and change it. At the same time, the volume of production and access of manufacturers to this market is limited.
Basic conditions of imperfect competition:
1) There are a limited number of manufacturers on the market
2) Exist economic conditions(barriers, natural monopolies, state taxes, licenses) penetration into this production.
3) Market information is distorted and not objective.
All these factors contribute to the disruption of the market equilibrium, since a limited number of producers sets and maintains high prices in order to obtain monopoly profits.
There are 3 types:
1) monopoly,
2) oligopoly,
3) monopolistic competition.
16)
The behavior of a firm under perfect competition
The behavior of the firm depends not only on time, but also on the form of competition. Consider the rational behavior of a firm under perfect competition. Let us remember that the goal of the firm is to maximize the gap between prices and costs. In a perfectly competitive market, no firm affects the price of its product. The price is set only under the influence of the total market demand and supply of all firms. If a firm raises the price of its product, it will lose customers who will buy its competitor's product. Her sales will drop to zero. This means that the firm has no control over the price. The value of its costs is determined by technology this enterprise. What can an entrepreneur do to maximize profits? It can only change the volume of production. The next question then arises: how much product should the firm produce and sell in order to maximize profits? To find the answer to this question, it is necessary to compare the market price of the product and the marginal cost of the firm.
If the firm will increase its output by one, two, three, etc. units, then each next unit(say, each new table) will add "something" to both total revenue and total costs. That "something" is marginal revenue and marginal cost. If marginal revenue is greater than marginal cost, then each unit produced adds more to total revenue than it adds to total cost.
In this regard, the difference between marginal revenue (MR - marginal revenue) and marginal costs (MC - marginal coast), i.e. profit (P2 - profit), increases:
The opposite happens when marginal cost is higher than marginal revenue.
Conclusion: the maximum total profit is achieved when there is equality between the price (P - price) and marginal costs (MC - marginal coast):
If P > MC, then production must be expanded. If R< МС, то производство необходимо сокращать. В результате на рынке совершенной конкуренции фирма расширяет свое производство до точки, в которой предельные издержки уравниваются с ценой. В этой точке фирма достигает оптимального уровня производства и переходит в положение равновесия.
If the volume of production is more or less than the optimal - the profit will be less than the maximum.
Therefore, there is only one value of output at which the firm will receive the maximum profit.
This profit maximization rule is true not only for one firm, but for the entire economy.
Conclusion: the economy achieves maximum efficiency the use of all resources when the marginal cost of producing goods equals their prices.
The problem of firm-industry equilibrium in the long run is different than in the short run. The equilibrium position is reached if the firm produces a certain amount of output at the minimum average cost of the long period, since in this state (point) the price is equal to marginal cost.
The fact is that if the minimum average cost of a firm exceeds the prices prevailing in the market, then some firms will leave the market, and the industry supply will decrease. This circumstance will increase the price.
If the minimum average cost is below the market price, then all firms in the industry are making excess profits. This will be an incentive for other firms to move into the industry. As a result, the industry supply will increase and the price will fall.
18) The efficiency of pure competition
Efficiency: Pure competition - produces the maximum amount of products with the minimum cost.
Flaws:
1. Each producer takes into account only those costs that pay off, while avoiding external costs and benefits, switching them to society (the costs of protecting environment lead to higher product prices.
· 2. They are not always able to provide the concentration of resources necessary to accelerate the introduction of new technologies, the development of new products, etc.
· 3. Standardization of products and not providing a sufficient range of consumer choice.
Pure competition and efficiency
As has already been clarified, the condition for long-term equilibrium of a competitive firm is P=MC=ACmin.
This triple equality says that although a competitive firm may make economic profits or losses in the short run, but in
in the long run, it will cover the average total cost by producing according to the rule MR(P)=MC.
Efficient use of limited resources requires the fulfillment of 2 conditions:
1. Production efficiency - requires that each product
produced in the least expensive way, i.e. with minimal costs (P=ACmin).
2. Efficient allocation of resources - limited resources
should be distributed among firms and industries so as to obtain a certain range of products that are most needed by society (consumers). P=MS
Are these conditions achieved in a perfectly competitive market? Further analysis will allow us to answer this question in the affirmative. 1. Production efficiency: P=AC(min).
As can be seen from the figure, in the long run, competition forces firms to produce at the point of minimum average cost and set the price that corresponds to these costs. This is obviously the most desirable
situation from the consumer's point of view. It means that firms must use the best available production technology. Consumers benefit from the lowest price of a product that is possible at a cost
currently prevailing.
2. Efficiency of resource allocation: P=MS.
The price of a product measures the benefit or satisfaction that society receives from an additional unit of a good. And the marginal cost of additional
units measure the loss (or cost) to society of other goods if resources are used to produce more of that good. If P > MC, it means that the society evaluates additional
a unit of a given product is higher than alternative products that could be produced from available resources.
If MC > P , then this means that resources are used in the production of this product at the expense of alternative goods that society values higher than additional units of this product. In conditions of perfect competition, each product is produced up to the point where P = MC. This means that resources in conditions of pure competition are distributed efficiently, since each item is produced to the point. , in
which the cost of the last unit is equal to the cost of the alternative goods sacrificed in its production. So, perfect competition helps allocate scarce resources in such a way that
to achieve maximum customer satisfaction. This is provided under the condition that P = MC.
The perfect competition market provides an initial, reference sample for comparing and evaluating the effectiveness of real economic processes on the
markets of imperfect competition.
21) Monopoly is exclusive right production, trade, trade and other types of activity belonging to one person, a certain group of persons or the state. This means that, by its very nature, a monopoly is a force that undermines competition and the spontaneous market. An absolute monopoly covering the entire economy completely excludes the mechanism of free market competition. In different countries and in different historical periods, various types of monopolies arise in the economy: natural, legal and artificial. There are five main forms of monopoly associations. Monopolies monopolize all spheres of social reproduction: direct production, exchange, distribution and consumption. Based on the monopolization of the sphere of circulation, the simplest forms of monopolistic associations arose: cartels and syndicates. More complex forms of monopoly associations arose when the process of monopolization extended to the sphere of direct production. On this basis, such a more high form monopoly associations, like a trust.
Monopolies, having an exclusive position, eliminate competitors everywhere, thereby destroying the normal market, reduce the quality of products, ignoring the achievements of scientific and technical progress, and cause a decrease in the overall efficiency of production.
The general form of monopolies develops when the association of entrepreneurs comprehensively - with the help of the state - subjugates the national economy and turns out to be both the main sellers and the main buyers in most markets. At the same time, the state itself acts as the largest monopolist, concentrating in its hands entire industries and production complexes, such as, for example, the military-industrial complex.
There are two ways to form monopolies: through capitalization of profits or through mergers and acquisitions. Recently, there has been a significant predominance of the latter method.
Monopolies also appeared in Russia, but their development was peculiar.
The first monopolies were formed in the 80s of the 19th century (the Union of Rail Manufacturers, etc.). The peculiarity of development was the direct intervention of state bodies in the creation and operation of monopolies in industries that meet the needs of state economy, or which had special significance in its system (metallurgy, transport, engineering, oil and sugar industries). This led to the early emergence of state-monopoly tendencies. In the 80s and 90s of the 19th century there were at least 50 different unions and agreements in industry and water transport. Monopolistic concentration also occurred in banking. Foreign capital had an accelerating effect on the process of monopolization. Until the beginning of the 20th century, the role of monopoly in the economy was small. The economic crisis had a decisive impact on their development
1900 - 1903 Monopolies gradually covered the most important branches of industry and most often formed in the form of cartels and syndicates, in which sales were monopolized while their participants retained industrial and financial independence. There were also associations of the trust type (Br Nobel partnership, inaccurate trust, etc.).
The absence of legislative and administrative norms regulating the activities of monopolies made it possible for the state to use legislation against them that formally prohibited the activities of monopolies. This led to the spread of officially unregistered monopolies, some of which, however, acted with the consent and direct support of the government (Prodparovoz, military-industrial monopolies).
The illegal position created inconvenience (restriction of commercial and legal activity) and therefore they strove for legalization, using the permitted forms of industrial associations. Many large syndicates - Prodmed, Produgol, Prodvagon, Krovlya, Lsed,
"Provolka", "ROST" and others - in form were joint-stock enterprises, the actual goals and activities of which were determined by special, tacit counterparty agreements. During the period of industrial upsurge "1910 - 1914" happened further growth monopolies. The number of commercial and industrial cartels and syndicates amounted to 150-200. Several dozen of them were on the transport. Many of the largest banks have turned into banking monopolies, whose penetration into industry, along with processes and the combination of production, has contributed to the strengthening and development of trusts, concerns, etc.
The monopolies were liquidated as a result of the October Revolution, in the course of the nationalization of industry and banks. The Soviet state partially used the accounting and distributive bodies of the monopolies in the creation of economic management bodies.
characteristic features monopolies are as follows:
1. An industry consists of a single firm that is the sole producer of a given product or service provider.
2. From the first sign it follows that the buyer must purchase the product from the monopolist or do without it. The fact that there are no close substitutes for the monopolized product is of great importance for advertising. However, there is often no need for a monopolist to use advertising.
3. In conditions of monopolized production, the manufacturer dictates the price and has the ability to manipulate the quantity of the product offered.
4. The existence of a monopoly implies the existence of barriers to the emergence in the industry of similar industries created by other manufacturers. These barriers may be economic, technical or legal.
The simple monopoly model is built on the assumption that all
unit of product sold over a specified period of time
They are sold at the same price. This pricing policy is
absolutely inevitable in any situation where resale is possible
products. For example, it is highly unlikely that book store,
located on campus (typical monopoly)
She suddenly began to sell textbooks in economics to senior students in
one price, and all the rest - with a 25% discount. Even if he
tries to do so, then some smart sophomore will soon
will start buying these books for their subsequent sale to undergraduates at
similar price. Soon the sale of books in this store at the original price will fall
However, not all firms are forced to sell all units of output at
one price. There are firms that set different prices for different
buyers for the same product. If prices are set for different
buyers, reflects not the difference in the costs of the firm associated with
individual approach to servicing these customers, the firm
engages in price discrimination.
So, the theater sets the ticket price of 5 rubles. for adults and 3
rub. for children carries out price discrimination, since the costs
theater are the same for all seats. Otherwise, for example,
on a vegetable base, where the price of 1 ton of potatoes is 4% lower at the wholesale price.
It simply takes into account the difference in costs when various types cash
operations.
CONDITIONS REQUIRED FOR PRICE DISCRIMINATION
In order for a monopoly firm to be able to carry out price
discrimination, the market must meet two conditions. Firstly,
buyers, due to impossibility or inconvenience, cannot resell
purchased products. Second, the seller must be able to
divide buyers into groups based on the elasticity of demand for
products. After that, those buyers whose demand has a high
elasticity, a high price will be offered, and those whose demand is elastic
Lower.
Discussion of the problem of conditions of discrimination is usually held in
context of monopoly theory, but this is not the only market
the structure in which such a phenomenon occurs. Any company that can
set a price on their products if they are able to share
potential buyers, depending on the elasticity of their
demand, and these latter, in principle, are deprived of the opportunity to resell their
products, sooner or later face the temptation to use
price discrimination strategy. Power plant charging different prices
for the population and for industrial enterprises, represents a monopoly
Carrying out price discrimination. The aviation company that takes from
tourists and businessmen different ticket fees, does the same.
Finally, a restaurant serving individual customers at discounted prices,
does the same.
Most monopolies are natural and subject to state regulation. That is, public utilities can in some way regulate the prices and tariffs of the monopoly. (This refers to industries where the cost structure of the enterprise and the demand for goods do not allow the existence of several firms, that is, the creation of a competitive industry is impossible). The profit-maximizing price of a monopolist is higher than its marginal and average costs. This allows the monopolist to earn large economic profits, but leads to increased income inequality and underutilization of resources. If the regulatory commission is trying to achieve an efficient allocation of resources, it will have to impose an upper price ceiling. The maximum price a monopolist can charge must be equal to its marginal cost.
23 ) The loss of society arising as a result of the monopolization of production, can be considered by comparing the surplus of consumers and producers in a competitive and monopolized markets (assuming that producers in a free competition market and a monopolist have the same cost curves), Fig. 7.19.
Under monopoly conditions, Q M units of products will be produced at a price P M (MC = MR), in conditions of perfect competition - Q C at a price P C - (P = MC).
The consumer's surplus is determined on the graph by the area bounded by the demand line and the market price. Thus, by buying less output and at a higher price under monopoly, consumers lose part of the surplus shown in the graph area A + B.
Producer surplus on the chart is the area bounded by the MC line and the market price. The monopolist gains an additional surplus, indicated by box A, by selling at a higher price, but loses part of the surplus, indicated by triangle C. Thus, his additional surplus is A - C.
The area on the graph, equal to the sum of B + C, is the total net loss from monopoly power, that is, the damage caused by the monopoly to society. Even if the monopolist's profits were taxed and redistributed to consumers of the product, efficiency would not be achieved because the output would be lower than under free competition. The total net loss is the social cost of this inefficiency.
It should be noted that the "pure" monopoly (the market share is close to 100%), the models of which are considered in theory, in reality practically does not exist. However, an example of it is the production protected by a patent.
In modern conditions, however, there is a further concentration of production and capital in the world. For example, in 1996 there was a merger of two Japanese banks, which are the world's largest banks: Mitsubishi (6th in the world) and Bank of Tokyo (14th in the world). As a result, the largest bank in the world (1st) was formed.
Rice. 7.19. Damage caused by monopoly
The two English pharmaceutical companies GLAXO and Welcome also merged, as a result of which the combined company GLAXO Welcome took first place in the world in terms of sales.
The policy of the state in relation to monopolies consists, first of all, in the development and application antitrust law, that is, a system of laws aimed at preventing the monopolization of markets.
However, the issue of attitudes towards monopoly remains debatable among economists. Defenders and supporters of monopolies believe that only large production has more incentive and opportunity to innovate. Criticizing the considered model, they note that it makes a serious assumption about the equality of costs in cases of perfect competition and monopoly (one MC line is graphically represented). However, as a rule, the merger of several firms into one leads to lower costs through the creation of unified supply, marketing and other services. In addition, the return on scale of production is possible in such a way that the effective volume of output of one enterprise will be equal to or even greater than the competitive volume. This situation is often observed in natural monopolies.
At the same time, the "opponents" of the monopoly note its additional costs of artificially maintaining barriers to entry into the industry, which are hardly expedient from the point of view of society, as well as the fact that the lack of competition inevitably leads to increased costs and inefficiency in management.
Thus, the general verdict economics is the conclusion that monopoly is less preferable for society than perfect competition, therefore it is necessary to regulate its activities in order to reduce the amount of social losses
24) monopoly power is the ability of the firm to influence the price of its product by changing the quantity of this product sold on the market.
The degree of monopoly power can be different. A pure monopolist has complete monopoly power, since is the only supplier of unique products.
But pure monopoly is rare. Most products have close substitutes. At the same time, most firms control the price to some extent; have some monopoly power. If there is only one monopoly firm operating in the market, one speaks of relative monopoly power.
A necessary condition for monopoly power is a downward-sloping demand curve for the firm's output.
So, a firm with monopoly power charges more than marginal cost and earns additional profit, called monopoly profit. Monopoly profit is a form of realization of monopoly power.
The degree of monopoly power, oddly enough, can be measured. The following indicators of monopoly power are used:
1. Lerner's exponent of monopoly power:
The Lerner coefficient shows the degree to which the price of a good exceeds the marginal cost of its production. L takes values between 0 and 1. For perfect competition, this indicator is 0, because P = MC. The more L the greater the firm's monopoly power. It should be noted that monopoly power does not guarantee high profits, because. the amount of profit is characterized by the ratio P and ATC .
2. If we multiply the numerator and denominator of the Lerner exponent by Q, then we get a formula for calculating monopoly power index: , or . Thus, high profits in the long run are also seen as a sign of monopoly power.
3. Degree of market concentration, or Herfindahl-Hirschman index:
where Pi is the percentage market share of each firm, or the firm's share of the industry's market supply, n is the number of firms in the industry. The greater the share of the firm in the industry, the greater the opportunity for the emergence of a monopoly. If there is only one firm in the industry, then n=1, Pi=100%, then H=10.000. 10.000 is the maximum value of the market concentration indicator. If H< 1000, то рынок считается неконцентрированным. Если Н? ≥ 1800, то отрасль считается высокомонополизированной. Нужно иметь в виду, что данный показатель не дает полной картины, если не учитывать удельный вес импортируемых товаров.
25)
In a pure monopoly, there is only one seller in the market. It could be state organization, private regulated monopoly or private unregulated monopoly. In each case, pricing is different. The state monopoly can pursue the achievement of various goals with the help of price policy. It may charge below cost if the item is important to buyers who are unable to purchase it at full price. The price can be set to cover costs or generate good returns. Or it may be that the price is set very high in order to reduce consumption in every possible way. In the case of a regulated monopoly, the government allows the company to set prices that provide a "fair rate of return" that will enable the organization to maintain production and, if necessary, expand it. Conversely, in the case of an unregulated monopoly, the firm itself is free to set any price it can sustain.
market. Nevertheless, for a number of reasons, firms do not always ask for the highest possible price. Here, the fear of introducing state legalization, the unwillingness to attract competitors, or the desire to quickly penetrate - thanks to low prices - to the entire depth of the market can play a role.
Except when operating in purely competitive markets, firms need to have an orderly methodology for setting the initial price of their products.
27) The pricing policy of an oligopolistic company plays a huge role in her life. As a rule, it is not profitable for a firm to increase the prices of its goods and services, since it is likely that other firms will not follow the first one, and consumers will "pass" to a rival company. If the company lowers the prices of its products, then in order not to lose customers, competitors usually follow the company that lowered prices, also reducing the prices of the goods they offer: there is a “race for the leader”. Thus, so-called price wars often occur between oligopolists, in which firms set a price for their products that is no higher than that of a leading competitor. Price wars are often detrimental to companies, especially those that compete with more powerful and larger firms.
What is meant by marginal productivity?
Let us show this with an example that may be useful to us later in the course of the presentation.
Consider an agricultural enterprise for growing wheat.
Let us assume that fertilizers were not applied and that the yield was still 15 centners per hectare. Let us now see what happens when successively increased doses of chemical fertilizers are applied, assuming that all other conditions of production remain unchanged. With the use of the first centner of fertilizers, the yield will jump to 20 centners per 1 ha, with the use of the second, it will reach 30 centners, etc. (Table 1).
Table 1 Quantity per hectare Average
product productivity 0 15 1 20 5 2 30 10 3 38 8 4 45 7 5 50 5 6 52 2 Product growth due to an increase in the amount of a given production factor - chemical fertilizer - shows the average productivity of individual units of this factor. If we assume that changes in the amounts of applied fertilizer are not represented by centners, but by minimal values - infinitesimal, hundredths, thousandths, ten thousandths of a centner, then we will also have infinite
Certainly small changes in the amount of production that will give us productivity at a given point, or marginal productivity. It is therefore defined as the ratio of the increase in product obtained to the increase in the factor of production under consideration, with infinitesimal quantities of both, and assuming that all other factors of production are quantitatively unchanged. In other words, the ultimate
the performance of the x factor is Since it is
the concept assumes that other conditions do not change, it is generally applicable only to a short period.
What we have said can be expressed graphically; rectangles correspond to average increments; line - to an infinitely small, or limiting, increase (Fig. 14).
The whole product will therefore increase with an increase in the amount of the factor "fertilizer" (capital), but, starting from the third increase in this factor, the increase in the product will go at a decreasing rate, as a result of which, when graphical expression of this phenomenon, a curve will be obtained, first rising up and then falling down. Indeed, let us show the variable factor C on the abscissa, and the corresponding total product on the ordinate. The resulting curve will be as shown in Fig. fifteen.
We gave an example in which the factor "capital" changes and the factor "labor" remains constant. Naturally, the same thing happens if we proceed from changes in the “labor” factor.
Let us turn, as before, to agricultural production. Let us assume that on a plot of 10 hectares, with some technical equipment T, 30 agricultural workers are working, producing 200 quintals of wheat. Suppose that by adding one more worker and keeping other conditions unchanged, the product will increase from 200 to 203 centners. We can attribute this increase in product to the 31 workers added. In this case, the marginal productivity of labor (i.e., the only factor that has changed in magnitude) will be:
203 - 200 = 3 (wheat) 31-30 == 1 (worker)
Quantity
We chose to start with the example of agricultural production, because it was in relation to it that the classics, or rather, Ricardo, introduced the concept of marginal productivity, since it was believed that the natural factor "land", being limited, gives rise to the phenomenon of diminishing productivity and, given social relations production, rent - an economic category, which we will consider shortly.
But this concept was extended to production in general and it was noted that if other factors of production remain unchanged and only one of them changes (increases), then this single factor leads to an increase in production that can be attributed to it, but this increase will sooner or later begin to fade. . In other words, at some point the marginal productivity of the factor in question will decrease if all other factors are still assumed to remain constant.
Many examples could be given, for example, in the textile industry, changing only the number of workers in it, but I think that this concept has been clarified; moreover, it will be further developed in an annex prepared by La Grasse. It is also obvious that by limiting ourselves to considering only two factors - capital and labor, taken as a whole, and not in their subdivisions, it is possible to express the so-called theory of production using two-dimensional graphs, changing one factor and keeping the other constant.
It is easy to understand how, proceeding from this principle, they came to the concept economic balance in the application by the entrepreneur at the enterprise of production factors. If one can attribute the increase in product to separate factors, then it is obvious that the application of these factors in combination will depend on their marginal productivity. The factor that, considering its price, is the most productive will be applied first. In essence, the discussion will be given, which, as we have seen, concerned the consumer with a comparison of the marginal utilities of various goods.
Since the factors of production have a market price, here we will also talk about weighted marginal
productivity, divided by the price of that factor, and a law will be deduced stating that each enterprise limits the number of individual factors employed so that the marginal productivity is proportional to the respective price, or that the weighted marginal productivity is equal.
In other words, the capitalist entrepreneur allocates his factors of production so that the last lira spent on a given factor represents the same productivity as the last lira spent on another factor. This means that marginal productivity, subject to prices, tends to equalize. Therefore, such a definition serves to indicate an obvious, banal fact, only expressed in terms more precise than those with which ordinary language can operate. But what is the significance of this analysis for economic theory? The value of this analysis is limited, although it has been widely developed and led to conclusions important for the economics of the enterprise. It refers not merely to an enterprise regarded as a subject of production, but to an enterprise which finds the market already quite ready. It should be included in such a market, but due to its small size, it cannot influence it. Thus, we studied not the process of market formation, but the reactions of an individual producer in the face of an already existing objective phenomenon - the market. This analysis does not allow you to explore the market and its laws. On the contrary, the entire formulation of this analysis proceeds from assumptions that constantly dissect the complex reality and thereby move away from it.
1 An attempt to theoretically substantiate the reaction of the entrepreneur to a change in the selling price was made in the famous web theorem, which thus introduces a limited dynamic analysis on the basis of subjectivist theory. It states, as will be shown in more detail in the Appendix, that when the price changes, demand responds immediately. The supply response, on the other hand, is delayed by one period of production, so that supply will have, to a greater or lesser extent, belated fluctuations in relation to price.
An increase in labor productivity is manifested in the fact that the share of living labor in manufactured products decreases, and the share of past labor increases, while absolute value the cost of living and materialized labor per unit of output is reduced. The change in labor productivity (IPT index) for a certain period in terms of output (B) or labor intensity (T) can be determined using the following formulas:
I pt \u003d In o / V b or I pt \u003d T b / T o;
PT \u003d V o / V b × 100 or PT \u003d (T b / T o) × 100;
ΔPT \u003d [(V 0 - V b) / V b] × 100 or ΔPT \u003d [(T b - T 0) / T 0] × 100,
where B 0 and B b - production output, respectively, in the reporting and base periods in the corresponding units of measurement;
T 0 and T b - labor intensity of products in the reporting and base periods, standard hours or man-hours;
PT - growth rate of labor productivity, %;
ΔPT is the growth rate of labor productivity, %.
The planning of labor productivity for sections, workshops, jobs is carried out by the direct method according to the formulas listed above. In general, for an enterprise (firm), labor productivity planning is carried out according to the main technical and economic factors in the following order:
the headcount savings from the development and implementation of each measure to increase labor productivity is determined (E i);
the total population savings (Eh) are calculated under the influence of all technical and economic factors and measures (Eh = ∑E i);
the increase in labor productivity at the enterprise (in the workshop, on the site) is calculated, achieved under the influence of all factors and activities (ΔPT) according to the formula , necessary to fulfill the annual volume of production while maintaining the output (productivity) of the base (previous) period, people.
The level of labor productivity at the enterprise and the possibility of its increase are determined by a number of factors and growth reserves. Under the factors of growth of labor productivity are understood the reasons for changes in its level. Under the reserves of labor productivity growth at the enterprise are meant the still unused real opportunities for saving labor resources. Labor productivity growth factors depend on the sectoral affiliation of the enterprise and a number of other reasons, however, it is generally accepted to single out the following groups of factors:
Raising the technical level of production;
Improving the organization of production and labor;
Change in the volume of production and structural changes in production;
Changes in external, natural conditions;
Other factors.
AT market conditions In economics, the concept of marginal labor productivity is becoming more and more widespread, according to which an additional increase in the number of workers leads to an ever smaller increase in the marginal product. At the same time, the marginal product of labor is understood as the amount of additional production that the enterprise will receive by hiring one additional worker.
Multiplying the marginal product by its price, we get the monetary expression of the marginal product, or the marginal (or additional) income from hiring the last worker.
In the case when the marginal product of labor is greater than the marginal cost of labor, it is necessary to increase the number of employees, while the total profit of the enterprise with an increase in the number of employees should increase.
If the marginal product of labor is less than the marginal cost of labor, then profits begin to decrease with the last employee hired. Therefore, it is possible to increase profits only by reducing the number of employees.
Thus, profit maximization is possible only at such a level of employment in the enterprise, when the marginal income received as a result of the work of the last hired worker is equal to the marginal cost of paying for his labor.
PLANNING THE NUMBER OF EMPLOYEES OF THE ENTERPRISE (FIRM). WORKING TIME BUDGET CALCULATION
The number norm (N h) is the established number of employees of a certain professional and qualification composition, necessary to perform specific production, managerial functions or scope of work. According to the norms of the number, labor costs are determined by professions, specialties, groups or types of work, individual functions, as a whole for the enterprise, workshop or its structural unit.
The number of employees is the most important quantitative indicator characterizing labor resources enterprises. It is measured by such indicators as payroll, attendance and average payroll number of employees.
The list number of employees of the enterprise is an indicator of the number of employees payroll on a specific date or date, such as May 20. It takes into account the number of all employees of the enterprise hired for permanent, seasonal and temporary work in accordance with the concluded labor agreements (contracts).
The attendance composition characterizes the number of employees on the payroll who came to work on a given day, including those on business trips. it required strength workers to perform a production shift task for the production of products.
The average number of employees is the average number of employees for a certain period (month, quarter, from the beginning of the year, for the year).
The average number of employees per month is determined by summing up the number of employees on the payroll for each calendar day of the month, including holidays and weekends, and dividing the amount received by the number calendar days month.
Determining the need for personnel in an enterprise (firm) is carried out separately for groups of industrial and non-industrial personnel. The initial data for determining the number of employees are: production program; norms of time, production and maintenance; nominal (real) working time budget for the year; measures to reduce labor costs, etc. The main methods for calculating the quantitative need for personnel are calculations of the labor intensity of the production program; production standards; service standards; jobs.
The standard for the number of employees (main pieceworkers) (N h) according to the labor intensity of the production program is determined by the formula
N h \u003d T pl / (F n × K vn),
where T PL is the planned labor intensity of the production program, normo-h;
F n - the normative balance of working time of one worker per year, h;
To vn - the coefficient of performance of time standards by workers.
The planned labor intensity of the production program is determined by the planned standard of labor costs per unit of output, multiplied by the planned output. The method of calculating the number of personnel by the labor intensity of the production program is the most accurate and reliable, as it requires the application of labor standards. Determining the number of workers according to production standards is more simplified and less accurate due to the pricing of products (works, services).
When determining the number of workers according to production standards, the following formula can be used:
N h \u003d OP pl / (N vyr × K ext),
where OP pl is the planned volume of production (work performed) in established units of measurement for a certain period of time;
H vyr - the planned rate of production in the same units of measurement and for the same period of time.
Planning the number of main workers in instrumental processes and auxiliary workers performing work for which there are service standards is reduced to determining the total number of service objects, taking into account the shift work:
H h \u003d K o / N o × C × K sp,
where K o - the number of units of installed equipment;
C - the number of work shifts;
K cn - the coefficient of conversion of the attendance number of workers to the payroll;
H o - service rate (the number of pieces of equipment serviced by one worker).
In discontinuous productions, K cn is defined as the ratio of the nominal time fund to the useful (effective), and in continuous productions, as the ratio of the calendar time fund to the useful (effective).
By jobs, the number of auxiliary workers is usually determined, for which neither the scope of work nor service standards can be established (for example, crane operators, slingers, etc.):
H h \u003d M × C × K sp,
where M is the number of jobs.
The number of service personnel can also be determined by the aggregated service standards, for example, the number of cleaners can be determined by the number of square meters of premises, the cloakroom attendants by the number of people served, etc.
The number of employees can be determined based on the analysis of industry average data, and in their absence, according to the standards developed by the enterprise. The number of managers can be determined taking into account the norms of manageability and a number of other factors.
In addition to the number of employees, a quantitative characteristic of the labor potential of an enterprise and / or its internal divisions can be represented as a fund of labor resources in man-days or man-hours. Such a fund (Frt) can be determined by multiplying average headcount workers (H cn) for the average duration of the working period in days or hours (T rv):
F rt \u003d H cn × T r.
The duration of working time (T rv) in the planning period can be determined on the basis of the working time budget using the following formula:
T rv \u003d (T to - T in - T prz - T o - T b - T y - T g - T pr) × P cm - (T km + T p + T s),
where T to - the number of calendar days in a year;
T in - the number of days off in a year;
T prz - quantity public holidays per year;
T about - the duration of regular and additional holidays, days;
T b - absence from work due to illness and childbirth;
T y - duration of study holidays, days;
Tg - time to perform state and public duties, days;
T pr - other absences permitted by law, days;
P cm - the duration of the work shift, h;
T km - loss of working time due to a reduction in the length of the working day for nursing mothers, h;
T p - loss of working time due to the reduction in the length of the working day for adolescents, h;
T s - loss of working time due to a shortened working day on pre-holiday days, h.
