Inany business entity, there will be different operations, which willresult in the production of goods or delivering a service. It isimportant as a manager or marketing personnel that you becomeconversant with various equations that you will face when dealingwith issues of business operations. It is vital to note that you mustdeal with the basic equation, A+B=C. If you need to have children,the husband must meet with a wife to produce an offspring, in simpleterms, two things must come together.
Also,if you need a desired outcome, and it can be achieved througheliminating something, it can be attained by the application ofA-B=C. The working of this equation would be when you fire anemployee because of his unwanted behavior to protect the reputationof an organization. At a complex level, an organization can use anequation to find out equilibrium in supply and demand. It occurs whenquantity demanded equals quantity supplied (Boyes& Melvin, 2012).
Furthermore,the equation can be expressed in a function in two ways quantitydemanded (Qd) will be represented by Qd=a-bP, where a and b arevariables and P is the price. On the other hand, Quantity supplied isrepresented by Qs=-a+bP (Boyes& Melvin, 2012).Thus, equilibrium can be achieved by equating the two functions.Moreover, the employees of an organization need to be conversant witharc and point elasticity, and production equations. For instance,“the total cost of production is calculated by summing up variablecost and fixed cost (TC=VC+FC),” (Boyes& Melvin, 2012).Furthermore,“the average cost can be calculated by dividing the total cost withquantity (AC=TC/Q),”(Boyes & Melvin, 2012).
Inaddition, an employee needs to be conversant with a marginal cost,which is “calculated by dividing the change in the total cost witha change in quantity (MC=change in TC/Change in quantity),”(Boyes & Melvin, 2012).Apart from these productions functions, there are also revenue,profit maximization, and price discrimination among others.
Boyes, W. J.,& Melvin, M. (2012). Microeconomics.Mason, OH: South-Western Cengage Learning.